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Earning Season Begins, and the Markets Move Higher

By Matt Thalman - Apr 9, 2013 at 1:06PM

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As investors turn their attention to what really matters -- earnings -- the markets rise.

Now that earnings season is finally here, investors can focus on more of the important factors: earnings, revenue, margins -- all the fun stuff. Alcoa kicked things off last night, and although the company beat earnings estimates, a revenue decline has some investors concerned.

But the company's slight misfortune has not held back the markets today. As of 12:50 p.m. EDT, the Dow Jones Industrial Average (^DJI 1.76%) is up 51 points, or 0.35%. The S&P 500 and the NASDAQ have both risen 0.28%. While the markets are climbing, a few of the Dow's big components are being left behind.

McDonald's (MCD 1.52%) has lost 0.5% today. Recently, several hundred fast-food workers in New York City gathered to protest their pay, which averages $8.25 per hour in the state of New York. The protest has some wondering whether a statewide, or even companywide, strike would make a difference. But many doubt that a walkout would change the status quo, pointing to Wal-Mart workers' long and varied disputes with their employer. 

Shares of General Electric (GE 2.27%) are down 0.5% today. One reason for the decline is the company's announcement yesterday that it will purchase Lufkin Industries for $3.1 billion. The purchase price is a 38% premium over Lufkin's closing price of last Friday. Some shareholders and analysts believe GE overpaid for the oilfield equipment manufacturer.  

Shares of IBM (IBM 1.74%) are flat, having recovered from earlier losses, as Hewlett-Packard (HPQ 5.38%) releases its newest servers, the Moonshot line. The Moonshot is expected to outperform traditional server systems in nearly every way imaginable. As demand for cloud computing grows, customers will want servers designed to handle large workloads at high speeds -- servers like the Moonshot. If HP's server is as good as advertised, IBM may experience some short-term effects, but it will likely bounce back if it can produce a competitive device in the future. 

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$33,212.96 (1.76%) $575.77
International Business Machines Corporation Stock Quote
International Business Machines Corporation
$139.27 (1.74%) $2.38
McDonald's Corporation Stock Quote
McDonald's Corporation
$251.87 (1.52%) $3.78
HP Inc. Stock Quote
HP Inc.
$38.75 (5.38%) $1.98
General Electric Company Stock Quote
General Electric Company
$78.76 (2.27%) $1.75

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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