US Indexes Broadly Lower; Alcoa Earnings, Trade Gap Weigh on Stocks


Stocks are broadly lower in morning trade as earnings season gets underway following Alcoa's ( AA ) earnings report after the closing bell yesterday. Meanwhile, new data showed the U.S. trade gap narrowed less than expected and news from Japan showed a worsening of the situation with one of its nuclear reactors, weighing on stocks.

Alcoa late Monday reported a Q1 profit of $0.27 compared to a loss of $0.20 in the same period a year ago. EPS from continuing ops ex-items were $0.28. The Thomson Reuters mean analyst estimate was for $0.27. Revenue of $6.0 billion is up 22% over first quarter 2010. The Street looked for $6.07 billion. At

least one downgrade of the stock emerged this morning.

In economic news, data showed the U.S. trade gap narrowed in February though not as dramatically as economists predicted, to $45.8 billion. Import prices did jump 2.7%, which will add to the recent conversation on global inflation.

Meanwhile, the International Energy Agency on Monday said global oil production fell by 700,000 barrels a day in March on reduced Libyan crude supply. Supply from the Organization of Petroleum Exporting Countries, or OPEC, fell by 890,000 barrels a day in March to 29.2 million barrels on a near 70% drop in Libyan output, the agency said in its monthly report.

Also, Japanese regulators on Tuesday assessed the crisis at the nation's damaged nuclear facility as level 7, the highest possible on an international scale, but said the amount of radiation released is around 10% that of the accident at Chernobyl in the former Soviet Union.

In company news:

Cisco ( CSCO ) announced that it will exit aspects of its consumer businesses and realign the remaining consumer business to support four of its five key company priorities -- core routing, switching and services; collaboration; architectures; and video. In connection with the changes to the consumer business, it is anticipated that Cisco will recognize restructuring charges to its GAAP financial results, with an aggregate pre-tax impact not expected to exceed $300 million during the third and fourth quarters of fiscal 2011.

Exelixis ( EXEL ) rises after Bloomberg reports that the company is working with Goldman Sachs Group to field potential takeover offers after clinical-trial results showed an experimental drug helped prostate-cancer patients, according to people with knowledge of the matter.

Nokia ( NOK ) launches two new handsets using the latest update of its Symbian software. The Nokia E6 is a business smartphone with a full qwerty keyboard that offers access to Microsoft Exchange among other applications. The X7 is focused on entertainment, with a large display for gaming, an 8 megapixel camera and high-definition-quality video.

eBay ( EBAY ) announced today that it has entered into an agreement to acquire additional shares in GittiGidiyor, an online marketplace in Turkey. EBAY already owns a minority stake in the company since 2007. Once the transaction is completed, EBAY will own approximately 93% of the outstanding shares of GittiGidiyor. Terms of the deal were not disclosed.

Shares of Alliance HealthCare Services (AIQ) are up 8.47% after the company raised its full year guidance for 2011. The company stated that it expects revenue within the range of $500 million to $530 million, up from it previous guidance range of $475 million to $505 million. Analysts expect revenues for 2011 to be $482.97 million, according to a poll by Thomson Reuters.

Commodities are down as June gold contracts are down $17, or 1.12%, to $1,451 an ounce while May crude oil contacts are down 3.21%, or $3.53, at $106.38 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 2.64% to $42.48 and the United States Natural Gas fund (UNG) is down $1.02, or 0.11%, to $10.67.

In precious metal ETFs, the SPDR Gold Trust (GLD) is down 0.94% at $141.32. Market Vectors Gold Miners (GDX) is down 1.74% to $61.02. iShares Silver Trust (SLV) is down 0.54% to $38.99.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: AA , CSCO , EBAY , EXEL , NOK

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