Stocks are overbought, showing fatigue after a run up in the last month. Traders are becoming increasingly worried about earnings reports coming in the next few weeks. Today, Dow dropped 186 bringing it back to Mar 25 level, decliners over advancers almost 4-1 & NAZ fell 45.
S&P 500 FINANCIALS INDEX fell back 4 to 122, the middle of its range in the last 2 months & above the 82 low set a month ago. The Index has been trading sideways despite a major effort last month by banking execs to spread favorable stories about their businesses bottoming. It began 2009 at 169.
After hours Aloca (AA) reported a loss per share of 59¢ vs an average estimate of 56¢, their 2nd consecutive quarterly loss. The stock was down 12¢ during trading hours & lost another 28¢ after the loss announcement. AA recently announced raising $1B in capital thru the sale of stock & debt, slashed the div, cut capital expenditures & is laying off 13% of its workers. They are experiencing lower demand from key customers such as car makers, construction & airplane industry. AA stock is selling at a 25 year low. While much of this may already be factored into the markets, this is a kick in the head markets won't appreciate.
Alcoa reports $497M loss in 1Q on lower prices- AP
AA news is already hurting stocks. Asian market such as Shanghai, Tokyo & Hong Kong are selling off on greater worries about the global recession worsening.
•Asian Stocks Fall for Second Day on Renewed Profit Concern; Alumina Drops
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