Before the bell: Stock futures point to higher start on Alcoa, ahead of data

Posted Jul 9th 2009 7:47AM by Melly Alazraki
Filed under: Before the Bell, International Markets, Earnings Reports, China, Market Matters, Alcoa Inc (AA), Economic Data

U.S. stock market futures advanced Thursday morning after Alcoa reported an narrower-than-expected loss to kick off the second-quarter earnings season. Unlike the last few days, today will be full of economic readings, including labor, retail and inventories indications.

Despite the debate in recent days that Alcoa (NYSE: AA) earnings reflect nothing on the economy, but only on the state of the aluminum industry, investors, nonetheless, forgot all about that when Alcoa reported late Wednesday a lighter than expected loss of $454 million and noted some stability. Alcoa shares, which have been pounded heavily ahead of the earnings to test the $9 level on Monday, are gaining about 4.5% in pre-market trading at $9.90 per share.

Alcoa's earnings may provide the support the market needed following the recent economic reports that showed any recovery will likely be a long and slow slog. Investors have started doubting the current value of securities following the rally since the March lows and stocks have been hammered recently. With Alcoa's earnings report, bulls just got a boost as it may be an indicator corporate profits will not be as bad as expected. To add to positive news, China reported strong auto sales in June, which jumped 36.5% -- their fastest monthly rate so far in 2009.

Today will be full of economic releases. Retailers are due to report their same-store sales figures for June throughout the morning. At 8:30 a.m., weekly initial jobless claims will give yet another data point about the labor market. Finally, at 10:00 a.m., May wholesale inventories will be released.

Overseas, world stock markets rose Thursday in response to Alcoa's earnings and strong car sales in China. Meanwhile, the Bank of England kept rates unchanged and surprised markets by announcing no expansion of its quantitative easing scheme.

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