2012 had been a great year for the Dow Jones Industrial Average
The perfect storm
Cue a left hook from a bad employment report and an upper cut from European bondholders, and the market was back on the mat, a ten-count from the ref echoing in its ear.
Word from the Federal Reserve that it was unlikely to pump more money into the economy had already made last week a loser for investors, and Friday's news that the U.S. added nearly 100,000 fewer jobs than expected spoiled a long Easter weekend for market-watchers. The Dow opened down 1% Monday and didn't move much during trading. Just when it looked like things couldn't get any worse, the blue chips dropped another 200 points on Tuesday as Europe digested the underwhelming jobs numbers and debt worries simmered again, particularly in Spain. Yields on Spanish 10-year bonds rose to 5.81%, representing a 4.11% premium over the benchmark German treasuries. This was the largest spread since December. Investors are particularly concerned that Spain's 23% unemployment rate and 1.7% contraction rate in its economy expected this year will force the EU to give it a bailout.
Back on its feet
International reports have again on bolstered the market today, as the Dow climbed 1.3% during trading. Investors appeared to react favorably to an Italian bond auction, which filled Rome's coffers with nearly 5 billion more euros. Also, the World Bank said it expects China's economy to grow by 8.2% this year. The global financial institution signaled confidence in a so-called "soft landing" by the world's No. 2 economy, which helped reassure investors.
Not out of the woods yet
Earnings season tends to come with a wave of anticipation and this quarter is no different. Alcoa's gotten the ball rolling, but there are plenty more big names investors should be keeping an eye out for. Our experts have singled out five stocks whose earnings reports will not only say a great deal about their future prospects but also of the economy as a whole. The information they present could be crucial to a number of investing decisions you're likely to make. Find out what these bellwether stocks are and why they're so important in the Fool's brand-new special free report: "5 Stocks Investors Need to Watch This Earnings Season." Get your free copy while it's still hot. Just click right here.