With the Dow Jones Industrials (^DJI -1.22%) 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 (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 (CVX 0.67%) 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 (XOM 0.18%) 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 (WMT 0.40%) 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.
