Wall Street modestly higher as Alcoa beats revenue estimates

NEW YORK (Reuters) - Stocks edged up on Wednesday after Alcoa got the earnings season under way with better-than-expected revenue and an encouraging outlook for the year.

The market's rise came after two-days of declines, with few catalysts to give direction and investors fretting about the start of earnings season after the prior quarter's lackluster performance.

Alcoa Inc said late on Tuesday it expects global demand for aluminum to grow in 2013, though the company expressed concern about the impact on business from a confrontation in Washington over the U.S. budget. Shares of Alcoa, the largest U.S. aluminum producer, were trading flat in early afternoon at around $9.12, after earlier trading higher.

Overall, corporate profits were expected to beat the previous quarter's meager 0.1 percent rise. Both earnings and revenues in the fourth quarter were expected to grow by 1.9 percent, according to Thomson Reuters data.

But the lowered expectations leave room for companies to surprise investors even if their results are not particularly strong, analysts said.

The current quarter was shaping up like the previous one, with companies lowering expectations in recent weeks, said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

"So the big question and focus is on revenue, and Alcoa had better-than-expected revenue," calming the market a little, Dailey said.

The Dow Jones industrial average <.dji> was up 56.44 points, or 0.42 percent, at 13,385.29. The Standard & Poor's 500 Index <.spx> was up 3.31 points, or 0.23 percent, at 1,460.46. The Nasdaq Composite Index <.ixic> was up 11.50 points, or 0.37 percent, at 3,103.31.

Shares of Herbalife Ltd rose 3.5 percent to $39.70, following news that hedge fund manager Dan Loeb has taken a stake of more than 8 percent in the nutritional supplements seller, according to a regulatory filing. Herbalife has come under fire from prominent short-seller Bill Ackman, who has accused the company of being a "pyramid scheme," a charge it vehemently denies.

Facebook Inc shares rose above $30 per share for the first time since July, 2012. The social network sent out a media invitation on Tuesday saying, "Come and see what we're building." Facebook, which has been tight-lipped about its plans after its botched IPO in May, invited the media to its Menlo Park, California, campus on January 15.

Among other companies reporting earnings, Constellation Brands , whose labels include Robert Mondavi and Ravenswood wines, reported higher profit and raised its forecast. The stock was down 0.8 percent at $35.74.

Apollo Group Inc slid more than 11 percent after it reported lower student sign-ups for the third straight quarter and cut its operating profit outlook for 2013. Apollo's shares were last at $18.63.

(Reporting by Angela Moon; Editing by Kenneth Barry and Dan Grebler)

You're reading an article about
Wall Street modestly higher as Alcoa beats revenue estimates
This article
Wall Street modestly higher as Alcoa beats revenue estimates
can be opened in url
http://newstetchily.blogspot.com/2013/01/wall-street-modestly-higher-as-alcoa.html
Wall Street modestly higher as Alcoa beats revenue estimates