alcoa

Alcoa’s Target and Estimates Lowered at Goldman Sachs (AA)

Alcoa’s Target and Estimates Lowered at Goldman Sachs (AA)

Aluminum producer Alcoa Inc. ( AA ) saw its price target and earnings estimates cut on Tuesday by analysts at Goldman Sachs. The firm lowered its target for AA to $14, which would represent a 19% upside to the stock’s Monday closing price of $11.72. Goldman also lowered its earnings estimates for the company, citing lower expected aluminum prices, and maintained its “Neutral” rating. Alcoa shares rose 7 cents, or +0.6%, in premarket trading Tuesday. The Bottom Line We had removed shares of AA from our “recommended” list July 2, 2008 when the stock traded at $32.11. The company has a dividend yield of 1.02%, based on last night’s closing stock price of $11.72. The stock has technical support in the $10 price area. If the shares can firm up, we see overhead resistance around the $13-$14 price levels. We are watching the shares closely, but would remain on the sidelines for now. Alcoa Inc. ( AA ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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How Commodity Charts Are Reacting, or Not, to China Currency News

News that China will re-value its yuan currency is viewed positively, of course, by world markets as it lowers inflation risk and exudes confidence about China’s growth picture. After an initial higher opening on Monday, what can be expected? The daily chart on the Shanghai is hardly a bullish chart, and in fact went down 3% on Friday. Does the news now invalidate this chart? I don’t know, but to even begin to look exciting, the index has to take out 2600, or 3 1/2% from Friday’s close at 2514, and then faces stiff resistance at around 2800. The S&P 500, meanwhile, needs to get through its 50% Fibonacci retracement of the April-June decline, which comes in at 1130, and then take out its 50-day moving average at 1139-40, or 2% from Friday’s close. If it runs out of gas at the 50% Fib retracement, then it might well test the 200-day moving average at 1110. One thing for sure is that if the Chinese situation is the bellwether of a start of a new up-cycle in the global economy, or the renewal of an up-cycle, then commodities will have to move. So, let’s take a look at the commodities. Copper and Gold Looking first at the copper situation, the iPath DJ-UBS Copper TR Sub-Idx ETN (JJC) appears to have a very big distribution top pattern with the resistance level at around 38.56 upwards to about the 42.83-43 zone. If the market is supposed to be a discounting mechanism, then it would seem as though copper would have made a move near the 40.16-40.86 area. Instead, copper had a very tough Wednesday, Thursday, and Friday of last week, and seems to be struggling. In addition, it’s below its relative moving averages, and in fact, those who watch the 200- and 50-day interaction are seeing a kind of death-cross happening, where the 50-day is about to cross under the 200-day, which is a very tricky situation. It seems as though copper, as a discounting mechanism, did not see the Chinese situation coming or it would have been prepared, since the Chinese would have been buying up copper before they made the announcement. Copper needs to show some sign that global supply/demand and global growth is improving, and right now that’s not what the chart is showing. Freeport-McMoRan Copper & Gold Inc. (FCX) shows a very similar picture. In the last couple weeks FCX has pretty much struggled because it’s seen as a copper producer in a sluggish US and global economic environment. To get any traction on the upside, Freeport will have to take out 71.50, or 8 1/2% above where it closed…

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Eastman Chemical Guides Higher – Analyst Blog

Filed in alcoa, earnings, economy, Gold Investing, Guidance, shares by on June 3, 2010 0 Comments

Shares of Eastman Chemical Company ( EMN ) increased 4.03% or $2.35 to close at $60.65 per share after the company increased its earnings guidance for the second quarter and full-year 2010. Inspired by the recovering economy and stabilizing raw material and energy costs, Eastman Chemical upped its earnings forecasts to $5.25 to $5.50 per share (excluding one-time charges) for the year from its prior guidance of $5.00 to $5.25 per share. For the second quarter, Eastman is expecting a profit of more than $1.60 per share, higher than the previous guidance of $1.50 to $1.60 per share. The Zacks Consensus Estimate is pegged at $1.57 per share for the current quarter and $5.30 per share for the full year 2010. Eastman expects the demand to continue to improve and the raw material and energy costs to remain steady in the latter half of the year. Recently, Eastman and aluminum giant Alcoa ( AA ) have entered into a partnership with the U.S. Department of Energy to reduce energy consumption by 25% per unit of output over a 10-year period. Other partners in the agreement are CalPortland (a building materials and construction solutions provider), Lufkin Industries (producer of machinery such as oilfield pumping units and electrical equipment) and Raytheon ( RTN ) (a major American defense contractor and industrial corporation with core manufacturing concentrations in defense systems and defense and commercial). Zacks Recommendation Eastman Chemical’s diversified chemical portfolio, along with its integrated and varied downstream businesses, is driving earnings. Eastman benefits from business restructuring and cost-cutting measures. Recently, the company has sold unprofitable units and closed businesses that could not be sold. Eastman’s fibers business continues to outperform and its strong specialty margins look increasingly credible. However, Eastman is facing weak demand in its Performance Polymer segment, which has led to lower sales volume and continued under-utilization of capacity, resulting in higher unit costs. Production disruptions on power outages are also pressuring volumes. We maintain our Neutral recommendation on Eastman Chemical. Read the full analyst report on “EMN” Read the full analyst report on “AA” Read the full analyst report on “RTN” Zacks Investment Research

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Bounce Should Be Short-Lived

Filed in alcoa, commodities, copper, economy, shares, silver, spdr, ubs by on May 24, 2010 0 Comments

Last week’s bottom line can be summarized quite simply: There’s a lot of serious chart damage out there! We certainly can look forward to a bounce — and that could be 7 hours or 7 days — which repairs or recovers some of the damage from last week. However, my sense is that the bounce will be fleeting and followed by another downleg. A quick look at the charts of the Volatility Index (VIX), or fear index, and the iShares Barclays 20+ Year Treas Bond (TLT), or flight to safety ETF, support the argument for a brief bounce in the stock market. The VIX had a huge downside reversal Friday that usually signals a directional change, and the TLT didn’t make a new high on Friday while a lot of indices took out their “flash crash” lows. But, again, the expected rally in the stock market will be tough to sustain, as it will be used by big fund managers to sell positions that they want to lighten up on into the strength so that they can raise cash and go shopping later on in this quarter. The focus of our analysis this week is on the commodities and materials sectors, and what they tell us about both the near and intermediate-term direction of the market. Any discussion of this sector begins with China, the big procurer of materials. The Shanghai Composite Index (SHCOMP), as we’ve been talking about week after week, has the worst looking multi-month chart of the all the indices, having peaked at 3483 in August of last year and last Friday hit 2482, a 34% downmove. However, from a near-term technical perspective, the Shanghai should rally off of Friday’s low and get to 2700-2800 before its next downmove. The Reuters/Jefferies CRB (Commodity Research Bureau) Index looks somewhat like the Shanghai, having had a coil-type pattern from its January high of 29.38, followed by a fallout into last week’s low of 24.75, a 16% sell-off. Any rally in the CRB index off of 24.75 is going to smash into some serious resistance at the prior low at 25.73, which would be a 2.3% rally. That’s the kind of bounce, somewhere between 2% and 5%, I’d expect for most of these indices after absorbing so much damage. The ProShares Ultra Oil …

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Stock Market News for May 18, 2010 – Market News

Filed in alcoa, Debt, earnings, euro, Gold Investing, shares by on May 18, 2010 0 Comments

U.S. stocks closed with marginal gains on Monday even as Europe’s debt malaise showed no signs of easing.  The euro, meanwhile, rebounded from a four-year low against the U.S. dollar as traders picked up the battered currency.  Investors were also concerned about how Europe will manage the fiscal crisis that has threatened to derail the global economic recovery.  They are worried that deeper spending cuts being implemented by some countries in the eurozone would compound the problems.  The $1 trillion aid package for most heavily indebted economies in the eurozone has done little to allay those fears even as markets across the globe reel under a wave of uncertainty.  Asian markets rallied today, with China’s Shanghai Composite index closing the day with a 1.4% gain.  The Hang Seng climbed 1.2% and the Nikkei rose 0.1%.  In morning trade, crude prices were gaining momentum, reclaiming the $70 per barrel level, even as the API inventory report due later today is expected to show a continued build in US crude stockpiles. On Monday, after plunging almost 184 points, the Dow industrials recovered and closed up 6 points or about 0.1%.  The broader S&P 500 index edged up 1 point, or 0.1%, and the Nasdaq composite index added 7 points or about 0.3%.  On the New York Stock Exchange three stocks advanced in price for every two that fell on volume of about 1.4 billion shares. Global growth concerns sent shares in industrials and commodity-related companies lower, with Alcoa (NYSE:AA) off 2.1% and Caterpillar (NYSE:CAT) down 1.7%.  Defensive plays such as AT&T (NYSE:T) and Procter & Gamble (NYSE:PG) advanced 1.5% and 1.3%, respectively, while consumer-related shares such as Kraft (NYSE:KFT), Wal-Mart (NYSE:WMT) and Home Depot (NYSE:HD) rose 1.7%, 1.2% and 1.1%, respectively.  Crude prices fell $1.45 to $70.16, partly on demand concerns.  Shares in Exxon Mobil (NYSE:XOM) retreated 0.5%. The euro could see some stabilization after an auction of Spanish 12- and 18- month bills later today.  Reports that Greece received $17.9 billion in EU aid this morning, in time to use some of the funds to repay a $10.5 billion bond issue, maturing tomorrow, could also have a post bearing on the shared currency. Today’s earnings calendar contains a number of key results from retailers, including Abercrombie and Fitch (NYSE:ANF), Dick’s Sporting Goods (NYSE:DKS), Home Depot (NYSE:HD), Saks (NYSE:SKS), TJX (NYSE:TJX), and Wal-Mart (NYSE:WMT).  On the technology front, firms reporting their earnings are: Analog Devices (NYSE:ADI) and DJIA component, Hewlett-Packard (NYSE:HPQ). Zacks Investment Research

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Commodity Charts Point to Market Vulnerability

This week we look at commodities charts, which indicate there may be some concerns regarding future global economic growth. Precious metals gold and silver, as safe havens in uncertain market environments, have constructive-looking charts, while industrial metals such as copper, steel, and aluminum, as well as oil and the materials sector, look vulnerable, suggesting a problem in terms of buyers and demand. Starting with gold and the Market Vectors Gold Miners ETF (GDX), the daily chart going back to October 2008 shows a series of higher lows and higher highs, with the GDX last week trying to get back up to the December 2 prior high of 55.40. As it’s approaching that level all the relevant moving averages and the stair-step ascension of the chart look very constructive. The weekly chart shows that the GDX is bumping up against some very serious resistance. There’s a lot of accumulation in the area between early ’08 and now, which could blow the GDX through the topside of the chart at 56.80-90, and if it really takes off, maybe even reach as high as 62 or 63. Newmont Mining Corp. (NEM), one of the components of the GDX, which is in the MPTrader portfolio, actually looks better than the GDX. Why? Because NEM made a new high last week above the Dec high, whereas the GDX itself has not. On the weekly chart NEM broke the high that goes way back to Jan ’08 at 57.55, an enormous breakout that’s probably going to retest 62 1/2, if not higher, possibly the low 70s. Another component of the GDX is the Barrick Gold Corporation (ABX), which looks pretty good though a lot like the GDX itself. ABX is pushing its Dec high, and looks like after the consolidation it had it should retest and take out the Dec high. Its weekly chart shows it’s bumping up against some resistance, and if it takes out last week’s high at 47 1/4 or so, it should take out the Nov-Dec high at 48, and then it’s off to the races for ABX. So, those are two components of the GDX that look relatively constructive, and in the case of NEM very constructive. Moving from the gold side of commodities to silver, the iShares Silver Trust (SLV) last week made a new high above its Dec high, consolidating at around 19, and still looks pretty good. (The SLV is not a silver mining index, but that index, the SIL, does not have a lot of data on it, so we’ll use the SLV.) The weekly chart shows how much upside the SLV can generate off a huge accumulation pattern. It’s probably going to take off and move above 20, a break above which could send silver rocketing. Pan American Silver Corp. (PAAS), one of the silver components, looks very powerful as well, largely because it took out its prior high from Dec at 27.31 late last week, consolidated, pulled back on Friday, but managed to close relatively strong. It looks as though it may have had a completed pullback already and is ready to take off again. The weekly chart looks pretty exciting, with the channel pointing up roughly to 30-32. If silver takes off, Pan Am Silver could go right with it, and I would not be surprised to see this go up to 10-15 percent from where it is right now in a very short period of time. Silver Wheaton Corp. (SLW), another component of SLV, also has a very powerful, constructive chart. The area between 13 and 19 appear to represent an accumulation and huge base, with the stock probably …

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Stock Market News for May 12, 2010 – Market News

Stocks ended a volatile session lower Tuesday as investors considered the implications of the European Union’s almost $1 trillion bailout plan announced over the weekend.  The announcement of the aid package resulted in a euphoric rally Monday but the excitement faded as worries about loan-hungry European nations’ ability to control their deficits resurfaced.  After Monday’s spectacular rally, the Dow Jones industrial average dropped 37 points, or 0.3%, to close at 10,748.26 on Tuesday.  The broader Standard & Poor’s 500 index eased about 4 points, or 0.3%, to 1,155.79, while the Nasdaq composite index ended just above unchanged.  On the New York Stock Exchange, advancing shares beat those that fell in price by a narrow margin on volume of 1.46 billion shares. Material stocks weakened on concerns that China would resort to further monetary tightening measures.  Beijing has already taken such steps as clamping down on bank lending to prevent the Chinese economy from overheating. However, investors are worried that further tightening measures would hurt demand for materials.  Shares in Alcoa (NYSE:AA) were the leading decliners among the Dow average components. After Monday’s 30% drop, the CBOE Vix, the market’s measure of volatility was almost flat.  Crude prices fell 43 cents to $76.37 per barrel on the New York Mercantile Exchange.  Treasury prices dropped, sending the yield on the 10-year note to 3.56% from 3.54% late Monday. Only seven of the thirty DJIA components closed higher on the day.  Disney (NYSE:DIS) was the leading gainer, up 1.3%, ahead of its earnings results.  The company reported estimate-beating numbers of 48 cents a share, versus Street projections of 45 cents on a 6% revenue gain, helped by box-office receipts from “Alice in Wonderland.”  However, the company appeared concerned about its theme park and resorts division.  Hewlett-Packard (NYSE:HPQ) retreated 1.4% on concerns about its reliance on international sales.  Shares in ExxonMobil (NYSE:XOM) dropped 1.2% on global demand concerns.  Merck (NYSE:MRK) fell 2.2% after it halted its first development effort in a follow-on biologic drug, seen as a rival to Amgen’s (NASDAQ:AMGN) anti-anaemia drug Aranesp. A China inflation report on Tuesday showed consumer prices jumped 2.8% in April from a year ago, the fastest pace in eighteen months, fuelling tightening concerns.  Fuel and industrial metals prices dropped on concerns such a step would impact demand.   Meanwhile, a 50-page civil complaint was filed against the Bank of NY Mellon (NYSE:BK) by the NY Attorney General Cuomo and two former officers over Madoff-related matters. A WSJ report said federal regulators may charge Morgan Stanley (NYSE:MS) with misleading investors regarding mortgage derivative products it helped create and sometimes bet against. Today’s calendar, although devoid of significant market-moving events, includes interims from such big names as Macy’s (NYSE:M) and Cisco (NASDAQ:CSCO). Zacks Investment Research

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Alcoa’s Price Target, Estimates Cut at Deutsche Bank (AA)

Filed in alcoa, dividend, earnings, Gold, Gold Investment, shares by on May 11, 2010 0 Comments
Alcoa’s Price Target, Estimates Cut at Deutsche Bank (AA)

Aluminum producer Alcoa Inc. ( AA ) saw its price target and earnings estimates lowered on Tuesday by analysts at Deutsche Bank. The firm slashed its price target on AA shares, which had closed at $12.59 on Monday, to $15.50 from $18. Deutsche maintained its “Hold” rating on the stock, however. Additionally, the analyst lowered its 2010 and 2011 EPS forecasts by 54% and 14%, respectively, to reflect essentially flat aluminum pricing, as well as lower volume estimates. Alcoa shares fell 24 cents, or -1.9%, in premarket trading Tuesday. The Bottom Line We had removed shares of AA from our “recommended” list July 2, 2008 when the stock traded at $32.11. The company has a dividend yield of .95%, based on last night’s closing stock price of $12.59. The stock has technical support in the $11 price area. If the shares can firm up, we see overhead resistance around the $14-$15 price levels. We are watching the shares closely, but would remain on the sidelines for now. Alcoa Inc. ( AA ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Why Correction Looking More Likely

Filed in alcoa, copper, economy, Gold, shares by on May 3, 2010 0 Comments

The bond market looks like it’s made a huge base and is about to break out. The charts on basic materials, China and the retail sector look vulnerable, too, suggesting the consumer may need a rest. All of this could be signaling a disappointment out of Friday’s jobs report for April and a possible correction in equities. Let’s start with the bond market. The chart on the iShares Barc lays 20+ Year Treas Bond (TLT) shows what has the potential to be a major base pattern over several months. The low in June of last year was at the 87 1/2 area and the low recently in April was at 87.30-40, which has not followed through on the downside. So it’s starting to look like a major double-bottom in the bond market. TLTs appear to be on the verge of taking out the declining 200 DMA and the trendline going back to March 2009, at around 92.50, only about 30-40 cents from where the TLT closed on Friday. A break through that would give more impetus to the W pattern, which projects to 99-100. And a break beyond that points to 108-112 – a very powerful move in the TLTs and the bonds, indicating that interest rates are coming down (at least on the long end, as they can’t get any lower on the short end). If the economy is expanding and data is as fantastic as some economist say it is, why does the bond market …

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Stock Market News for April 28, 2010 – Market News

U.S. stocks dropped sharply on Tuesday as fears that a deepening debt crisis in Europe would stall a global economic recovery overshadowed solid earnings reports and Goldman’s testimony on the Hill.  The Dow average plunged more than 200 points as Standard & Poor’s downgraded Greece’s credit rating to below investment grade and cut Portugal’s debt rating by two notches to A-minus.  The sharp selloff came at a time when market participants were gearing up for a pullback given the recent run-up in stock prices.  The downgrades gave traders reason to cut their exposure to riskier bets and divert funds to safe-haven instruments like U.S. Treasury bonds.  Among the 30 DJIA components, 28 closed lower on the day, led by declines in Alcoa (NYSE:AA), off 4.3%, and Caterpillar (NYSE:CAT), down 4.4%. Only 3M (NYSE:MMM) managed a gain, helped by its estimate-topping numbers and increased full-year guidance.  The wave of selling sent 481 of the S&P 500 stocks lower on the day. Nevertheless, the growth story appeared firmly in place as big Wall Street names continued to surprise with estimate-beating numbers.  Far away from Goldman and Greece, economic posts too pointed towards a strengthening economic recovery. Even as Goldman’s two top executives testified before the Senate, defending allegations of fraud and wrongdoing, and 3M (NYSE:MMM) and DuPont (NYSE:DD) came out with positive earnings results, the ratings downgrade had traders worrying if Greece was heading towards a financial collapse.  Leading European stock indexes dropped by 2.5% to 6% as fears of debt crisis contagion rattled investors.  Germany’s unwillingness to help fund Greece’s finances without sufficient austerity measures in place also multiplied traders’ worries.  All three major indexes posted their sharpest declines in more than a month. The Dow Jones industrial average plunged 213.04 points, or about 2%, to 10,991.99.  The broader S&P 500-…

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Option Queen Letter

The S&P 500 futures contract plowed higher for the day and for another week. We have seen this index rally for the past three months. It is now approaching the 0.618% Fibonacci retracement number which is at about 1237.86. We observe on the daily action, a pattern of softness intraday with buying at the end of the day. There could be two possible reasons for this behavior; one is that institutions are making their decision late in the day and investing in the last hour of trading and the other, those who were short all day looking for a market correction, threw in the towel by the end of the day and covered their positions. We believe that it may be a combination of the two causing the end-of-day rallies. We certainly understand the reasoning for this. After all, how happy can you be earning 0.45% on your money and then enjoying the tax you have to pay on that interest your money earned? Basically, you are losing money, even if we were to factor in very tame inflation. (Many economists believe that we are in a disinflationary environment, we disagree and believe that we are in stagflation.) Yes, the market has been overbought for months, but this behavior can continue until it ends. Reasonable people understand that this will persist until it doesn’t. Remember, actions once put in to motion tend to remain in that direction. To change direction we need to see exaggerated force in opposition to the current force and since the “buy the dips” crew is back in action that force is lacking. Think about bad habits like smoking; it is easier to keep smoking than to quit. Quitting takes a lot of effort and pain. Besides, bull markets are a lot more fun than are bear markets. Earnings season begins on Monday with Alcoa’s release after the close. Expectations are running to the high side and the market will meet those expectations. Think about the comparisons to last year …

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Gold Drops on Alcoa (NYSE:AA) Results

Gold and Oil Gold and other metals headed south today, as the results of Alcoa (NYSE:AA) disappointed; stocks also fell as investors responded to the poor performance of Alcoa, generating concerns the economy isn’t anywhere near a sustainable recovery, if it’s in a recovery at all. Long term investors in gold should be too concerned, as this is a temporary blip in the market, as gold

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