Wall Street opened higher on Wednesday after Alcoa got the earnings season under way with better-than-expected revenue and an encouraging outlook for the year.
The Standard & Poor’s 500-stock index rose 0.5 percent in morning trading, the Dow Jones industrial average added 0.6 percent and the Nasdaq composite index was up 0.6 percent. European shares were moderately higher in afternoon trading.
Alcoa said it expected global demand for aluminum would continue to grow in 2013, though the company kept a cautious tone as worries lingered over a looming budget confrontation in Washington. Shares of Alcoa, the largest aluminum producer in the United States, were 0.2 percent higher.
Still, investors were wary about the outcome of the fourth-quarter earnings season. Profits were expected to beat the previous quarter’s lackluster results, but analysts’ estimates were down sharply from where they were in October. Earnings were expected to grow by 2.7 percent, according to Thomson Reuters data.
Equities have pulled back over the last two sessions from last week’s rally, which was spurred by a deal in Washington that averted automatic spending cuts and across-the-board tax increases.
“With the euphoria of the fiscal cliff deal wearing off, the market is looking for the next positive theme and the hope is that earnings season can fill that need,” said Andre Bakhos, director of market analytics at Lek Securities in New York. “With expectations muted, any semblance of decent numbers could provide a robust upside potential.”
Constellation Brands, whose labels include Robert Mondavi and Ravenswood wines, rose 0.4 percent after it reported higher profit.
On the downside, Apollo Group slid more than 9 percent after it reported lower student sign-ups for the third straight quarter and cut its operating profit forecast for 2013.
Dish Network late Tuesday announced a bid for Clearwire that trumped Sprint Nextel’s $2.2 billion offer, setting the stage for a battle over the wireless service provider. Clearwire was up 7.5 percent, while Sprint lost 1.8 percent.
Seagate Technology, the maker of computer hard drives, rose 4.5 percent after it raised its second-quarter revenue forecast.
Wall Street Modestly Higher
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Wall Street Modestly Higher
