Dow Climbs on Earnings Anticipation

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Go ahead and take a breath. A deep breath -- using your nose, not your mouth. Do you smell that? No, it's not flowers blooming or the livelihood of spring. It's earnings season, and it kicked off this afternoon. Wall Street seemed to like the aroma Monday, as the Dow Jones Industrial Average (DJINDICES: ^DJI  ) added 48 points, or 0.3%, to close at 14,613.

Alcoa (NYSE: AA  ) was the particular focus of the day, and the stock added 1.8% in anticipation of its after-hours report. When the numbers finally came, however, results were mixed. The aluminum producer beat profit expectations, but sales disappointed, falling from $6.01 billion in the year-ago quarter to $5.83 billion in the recent period. Alcoa's CEO projects a better year ahead in 2013, but shares traded marginally lower following the announcement.

The next blue chip to announce earnings will be JPMorgan Chase (NYSE: JPM  ) on Thursday. Its stock, too, ended toward the top of the Dow, adding 1.4% after the bank redeemed almost $5 billion in high-yielding preferred shares. Perhaps more influential, though, is talk that CEO and Chairman Jamie Dimon could be ousted from his position at the head of the board; last year's $6 billion losses from a single trader dubbed the "London Whale" have raised the eyebrows of both investors and regulators. Dimon's in the hot seat.

Even while dealing with internal problems, JPMorgan downgraded Johnson & Johnson (NYSE: JNJ  ) shares, sending stock in the health-care company 1.1% lower. Predicting lower guidance from the business at its earnings call next Tuesday, the analyst -- as analysts are prone to do -- got oddly precise with the numbers, claiming the company's stock is overvalued by 8%.

Still, the biggest mover in the index today was Bank of America (NYSE: BAC  ) , which added 2% to start the week. B of A doesn't report until next Wednesday, but financials as a whole outperformed today. Although there wasn't major news from the Charlotte-based bank, shares are nearly 80% more volatile than the broader market, making 2% swings like today's more common than most other stocks.

That volatility is part of what allowed Bank of America's stock to double in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

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Related Tickers

9/30/2016 5:01 PM
^DJI $18308.15 Up +164.70 +0.91%
AA $10.14 Up +0.18 +1.81%
Alcoa CAPS Rating: ***
BAC $15.65 Up +0.49 +3.23%
Bank of America CAPS Rating: ****
JNJ $118.13 Up +0.86 +0.73%
Johnson and Johnso… CAPS Rating: *****
JPM $66.59 Up +0.94 +1.43%
JPMorgan Chase CAPS Rating: ****