As of 2 p.m. today, the Dow Jones Industrial Average (INDEX: ^DJI) surged a whopping 0.9%, bouncing back after two days of bloodletting following Friday's disappointing jobs report.
What gives? Well, to some extent, there's nothing terribly unusual about a day of big gains following days of big losses. Stock sell-offs create opportunities that other investors step in to buy. But a big part of the surge likely has to do with Alcoa's (NYSE: AA) blockbuster earnings report last night.
The world's largest aluminum producer made $0.09 per share last quarter, trouncing analysts' estimates of a $0.04 loss. That announcement helped send the stock up nearly 8% so far today. Boeing (NYSE: BA) is also up more than 2% after Alcoa raised its estimate for aerospace demand.
Alcoa is also considered a bit of a bellwether whose business performance is somewhat indicative of the broader market. Aluminum is a widely used material, so strong demand for the metal foreshadows strong sales across the economy. That's obviously welcome news to a market that's still jittery over weak estimates for last month's jobs gains and the slow-moving European financial crisis.
Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM) are also up big -- 3.5% and 2.5%, respectively. With $1.1 trillion in commercial and consumer loans between them, the vast majority domestic, the two megabanks are highly sensitive to what happens in the U.S. economy.
Still, long-term investors with plenty of time to invest before retirement don't need to fixate too much on the day-to-day movements of the market. Nor should we fret when stocks slide. As Warren Buffett reminds us in his most recent annual letter, "if you are going to be a net buyer of stocks in the future ... you are hurt when stocks rise. You benefit when stocks swoon."
With that in mind, stay focused on the stock opportunities this earnings season brings us. To get a jump on the five stocks investors need to watch this earnings season, you can click here now. Our chief investment officer and some top analysts agree these are the ones you don't want to miss.
