US stocks rise as earnings season begins

The S&P 500 today moved within 1% of its all-time high, as stocks rallied on Wall Street for a fourth day in a row.

The US earnings season kicked off last night with Dow-component Alcoa reporting better-than-expected sales after the close and maintained its forecast that aluminium demand will grow by 7% in 2013.

Alcoa beating analysts’ estimates on the revenues front and matching them on earnings has meant the second-quarter earnings season has got off to a promising start, and that has brought some optimism to the market about how companies are performing and what we might hear from the big names over the next few weeks.

The Dow was up by 0.49% or 74 points at 15,298 by early afternoon in New York, while the S&P 500 gained 0.76% to 1652.

Expectations for this quarter have slowly dwindled in the last few months, and are now so low that they should not prove to be a difficult hurdle for companies to meet or beat. According to Thomson Reuters, analysts expect second-quarter revenues for the S&P 500 to rise by just 1.5% from the same quarter in 2012.

Alcoa is the first company in the Dow to report each quarter and is therefore generally taken to get the earnings season underway. Things are slow on the earnings front over the next few days though, until we get to Friday, when we hear from Wells Fargo and JP Morgan. Those will give a steer on the financial sector and from then on in earnings will be coming thick and fast, with the likes of Citigroup, Goldman Sachs, IBM, Microsoft, Intel and Bank of America all reporting next week.

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