With the Dow Jones Industrials (INDEX: ^DJI ) down again this morning and the threat of a three-day losing streak looming, investors are increasingly worried over whether a long-awaited correction could be coming. Although September was a pleasant surprise, October has historically included a number of notable declines, with the crashes in 1929 and 1987 obviously heading the list. As the early trickle of earnings reports becomes a flood in the next week or two, you'll get a much better picture of whether worries are justified. For now, the Dow is down about 44 points as of 10:45 a.m. EDT.
Earnings season started yesterday, and investors in Alcoa (NYSE: AA ) apparently weren't too happy about it. Although the aluminum company managed to top analyst expectations by posting a profit of $0.03 per share after adjusting for one-time charges, Alcoa's forecast of weaker Chinese demand in heavy-truck and trailer manufacturing and slowing growth in Chinese can and packaging business chilled investors. The stock is off almost 4% this morning.
Chevron (NYSE: CVX ) also fell more than 3% as the oil giant issued a warning in advance of its third-quarter report. The company cited disruptions from Hurricane Isaac and a refinery fire, as well as lower production and realized prices as reasons for its reduced earnings expectations. The news also pulled ExxonMobil (NYSE: XOM ) down about three-quarters of a percent, as both companies face much the same challenges in the current environment. Yet Chevron expects a rebound in the fourth quarter, potentially making the sell-off a buying opportunity.
Finally, Wal-Mart (NYSE: WMT ) managed to buck the trend, rising nearly 3% as the company builds momentum behind its Wal-Mart To Go same-day delivery service. With the retail leader facing increasing competition from online retailers promising cheap, fast shipping, Wal-Mart's initiative addresses the demand for speed and simplicity. Wal-Mart also likely benefited from strong earnings at rival Costco, which soared more than 4% this morning.
Keep on earnin'
Whether the Dow streaks lower or breaks higher depends on earnings season. Earnings will move the markets in the coming weeks, and focusing on each company can give you an edge. If you're looking for some long-term investing ideas, let me invite you to read the Fool's popular special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.