Before the bell: Futures lower as oil rises, despite Alcoa earnings
Posted by: in Latest NewsFiled under: Before the bell, Earnings reports, Deals, Market matters, Alcoa Inc (AA), Sears Holdings (SHLD), Economic data, Oil, Federal Reserve
U.S. stock futures were lower early Wednesday morning as oil prices rebounded following Iran testing a long-range missile. Oil has dropped over $9 the past two days, allowing the market Tuesday to stage a rally on financials. This day, ahead of the crude inventory report, it seem oil will renew its center stage focus, damping mood despite somewhat encouraging results from aluminum giant Alcoa Tuesday after the close.
On Tuesday, after having a shaky begin, U.S. stocks closed with significant gains after Federal Reserve Chairman Ben Bernanke stated the Fed will try to further help brokerages with emergency funds to tap. This helped financials rally from current doldrums. Of course, having oil prices easing by the biggest two-day drop in nearly four months helped push stocks higher as well. The Dow industrials ended 152 points higher, or 1.36%, the Nasdaq Composite rose 51 points, or 2.28%, and the S&P 500 added 21 points, or 1.71%.
But oil prices this morning are again moving higher after Iran test-fired nine missiles, renewing fears of a conflict that could cut global oil supplies. Also this day, traders are waiting for the weekly report on fuel inventories from the U.S. Department of Energy due at 10:30 a.m. EDT.
In corporate news, Alcoa Inc. (NYSE: AA) shares were almost 3.5% higher in after-hours trading following the report of its second-quarter results Tuesday after the close, which kicked off the second-quarter earnings period. While the aluminum giant posted a drop in quarterly profit on higher costs, it beat Wall Street estimates. Higher prices couldn’t offset enough the higher costs, which will likely continue.
Meanwhile, retail continues to hurt with chain Steve & Barry’s close to filing for bankruptcy. The Wall Street Journal states that Sears Holdings (NASDAQ: SHLD) is interested in acquiring some of the clothing chain’s labels.
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