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FXstreet.com (Barcelona) - In terms of US markets it was another day of consolidation as we seem to be still in search of a major catalyst following the Fiscal Cliff frenzy of the last few weeks. Indeed yesterday saw the S&P 500 (-0.32%) almost mirror Monday's performance as sentiment was somewhat weighed by some poor European economic data and also a later-denied rumor that France's credit rating was facing an imminent downgrade. Nine out of the ten major sector groups finished lower in the US but it was the weakness in Telecoms (-2.69%) that stood out, driven by a 3% drop in AT&T despite news that the company had sold more than 10m smartphones in the fourth quarter.

The S&P 500 finished off its intraday lows, though, as the market awaited what was eventually a decent set of results from Alcoa after the bell. The company reported an EPS of 6cps for Q4, which was in line with market consensus but with revenue numbers that were nearly 6% higher than analysts' estimates. The forward-looking guidance was also rather upbeat. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, "Indeed the company now sees global aluminum demand growth of 7%, up from 6% last year and running ahead of the 6.5% rate required to meet the company's forecast." Interestingly Alcoa also stated that demand in China is "coming back". AA stocks rallied about 1% in extended hours trading while the company's 2021 bonds finished 7bp tighter on the day.

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