Dow May Rise After Alcoa Beats the Street

LONDON -- Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open up by 0.32% this morning, while the S&P 500 (SNPINDEX: ^GSPC  ) may open 0.41% higher. CNN's Fear & Greed Index is recovering fast from recent lows and is currently at 42, up from 28 one week ago.

European markets edged higher this morning as investors welcomed yesterday's strong performance from the Dow and the renewed stability in the eurozone, now that Greece's next aid payment has been agreed and the threat to Portugal's austerity program has receded. However, markets may still be feeding off future quantitative-easing potential -- the FTSE 100 was one of the biggest risers in Europe this morning after new data showed that U.K. manufacturing fell by 0.8% in May, or 2.9% on a year-on-year basis, suggesting that more QE may be likely in the U.K.

The NFIB monthly small-business index was released earlier this morning. A drop from 94.4 to 93.5 indicates a small decline in optimism among small-business owners. According to the NFIB's report, "While job creation plans increased slightly in June, expectations for improved business conditions remained negative."

May's Job Openings and Labor Turnover survey from the Department of Labor is due at 10 a.m. EDT. Companies due to report earnings today include clothing and footwear manufacturer Wolverine Worldwide, which reported record revenue of $587.8 million for its second fiscal quarter and adjusted earnings of $0.46 per share, beating the company's previous guidance for $0.31 to $0.35 per share.

Stocks that may be actively traded this morning include Alcoa (NYSE: AA  ) , which reported quarterly earnings of $0.07 per share last night, beating analysts' estimates of $0.06. However, it's worth remembering that these same analysts had heavily downgraded their estimates for the firm over the last month. Despite this, investors are likely to be encouraged by Alcoa's confirmation of its growth forecasts for China and the firm's expectation that global aluminum demand will exceed supply this year. Alcoa shares closed 1.4% higher last night, before its results were published, and they're 1% higher in premarket trading this morning.

Other companies that may be actively traded include Tesla, which is 2.9% higher in premarket trading following news that it will join the Nasdaq-100 on July 15. Global mining stocks rose this morning, buoyed by Alcoa's positive forecast for the Chinese economy, and a 1% rise in the price of gold this morning has helped to lift gold miners, with Barrick Gold up 3% in premarket trading.

Finally, let's not forget that the Dow's daily movements can add up to serious long-term gains. Indeed, Warren Buffett recently wrote, "The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions." If you, like Buffett, are convinced of the long-term power of the Dow, you should read "5 Stocks To Retire On." Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

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Related Tickers

9/30/2016 11:05 AM
^DJI $18303.87 Up +160.42 +0.88%
^GSPC $2169.27 Up +18.14 +0.84%
S&P 500 INDEX CAPS Rating: No stars
AA $10.05 Up +0.09 +0.85%
Alcoa CAPS Rating: ***