US Stocks Flat Ahead of Earnings Season

By Franklin Yu
Epoch Times Staff

NEW YORK—U.S. stocks finished Monday marginally higher as investors are turning their attention to the fourth-quarter, corporate earnings season to look for clues on the direction the U.S. economy is heading.

The Dow Jones Industrial Average added 32 points, or 0.3 percent. The S&P 500 Index eked out a gain of 3 points, or 0.2 percent, while the technology-heavy Nasdaq Composite Index finished higher by 2 points, or 0.1 percent.

Shares of Apple (Nasdaq: AAPL) briefly touched an all-time high on Jan. 9 after analysts from Goldman Sachs Group Inc. raised the company’s price target to $550. However, its shares ended the day slightly lower. Netflix also ended the day higher by almost 14 percent, after the company announced that it launched a new service in the U.K. and Ireland.

Markets were largely quiet on Monday as investors digested a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel to discuss the European debt crisis. “From our point of view, the second Greek aid package including this restructuring must be in place quickly. Otherwise it won’t be possible to pay out the next tranche for Greece,” Sarkozy and Merkel said in a joint press conference on Monday in Berlin.

The fourth-quarter earnings season unofficially kicked off Monday evening—aluminum producer Alcoa was first to report earnings, with a fourth-quarter loss in line with analysts’ expectations. Alcoa has been a bellwether for the economy since economic expansion requires significant inputs such as aluminum and other metals.

As for Alcoa, the company said that it was hurt by lower demand due to a sluggish global economy. Its fourth-quarter loss was $191 million, or 18 cents per share. The results included $185 million in nonrecurring charges.

The results were “solid performance in a volatile year,” said CEO Klaus Kleinfeld in a statement. Revenues in the fourth quarter were up 6 percent to $6 billion, compared to the same quarter in 2010. The Pittsburgh-based Alcoa is the first Dow Jones component to report earnings this year.