Stocks fall with Alcoa; oil drops

By Walter Brandimarte

NEW YORK (BestGrowthStock) – Global stocks fell on Tuesday as aluminum maker Alcoa Inc missed its revenue target while the euro was nearly flat against the dollar after Greece successfully sold short-term debt at very high yields.

U.S. Treasury debt prices rose on safe-haven buying as investors remained cautious about the fiscal problems of the weakest euro zone members and before a slew of key corporate earnings that will help gauge the strength of the economy.

Greek bond prices fell after the country sold a total of 1.2 billion euros ($1.63 billion) of six-month and one-year T-bills, in its first borrowing test since the euro zone agreed on a standby rescue package for the debt-laden country.

The very high yields paid on the bills — 4.55 percent and 4.85 percent, respectively — reminded investors of the soaring costs Greece will have to pay to further access the market.

“It does not really change the underlying position that Greece has very tough times ahead,” said Ben May, economist at Capital Economics in London.

In the United States, the cautious mood was reinforced by quarterly results that showed Alcoa Inc (AA.N: ) missed its revenue target, even as earnings were in line with expectations.

“This will certainly be an earnings period where there is continued focus on revenues,” said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

“Investors are looking for signs of revenue growth to show that the economic rebound is real and is generating real demand,” he said.

But a rise in shares of General Electric Co (GE.N: ) and other big industrial names supported the Dow.

The Dow Jones industrial average (.DJI: ) was up 0.83 point, or 0.01 percent, at 11,006.80. The Standard & Poor’s 500 Index (.SPX: ) was down 2.91 points, or 0.24 percent, at 1,193.57. The Nasdaq Composite Index (.IXIC: ) was down 3.24 points, or 0.13 percent, at 2,454.63.

Alcoa’s shares declined 2.3 percent, while GE’s shares rose 1.7 percent.

The FTSEurofirst 300 index (.FTEU3: ) of top European shares ended 0.26 percent lower, with energy companies sliding after U.S. crude oil prices pushed lower for a fifth consecutive session.

Energy companies Total (TOTF.PA: ), ENI (ENI.MI: ), BG (BG.L: ) and StatoilHydro (STL.OL: ) all fell between 0.6 and 1.7 percent.

Crude oil prices slumped $0.54, or 0.64 percent, to $83.80 per barrel on speculation that inventory reports will show stockpiles rose again last week.

The drop also weighed on commodity-exporting emerging economies, leading the MSCI stock index for the emerging markets (.MSCIEF: ) to decline 0.7 percent.


Analysts said markets were wary ahead of key first-quarter earnings reports this week, including JPMorgan Chase & Co (JPM.N: ), Google Inc (Read more about Google Stock Analysis) (GOOG.O: ), Bank of America Corp (BAC.N: ) and General Electric Co (GE.N: ).

The cautious mood inspired investors to buy safe-haven U.S. Treasuries. The benchmark 10-year U.S. Treasury note was up 3/32 in price, with the yield at 3.8243 percent.

Greece’s 10-year bond yields rose from a session low of around 6.72 percent to around 6.94 percent according to Tradeweb after the sale of short-term debt.

The euro fell (Read more about the trembling euro. ) to a session low as investors focused on the fiscal problems of the euro zone, leaving aside earlier pessimism about February U.S. trade data that had weighed on the greenback.

The European single currency was practically unchanged at 1.3583 per greenback, after touching a session low of $1.3552.

Against the Japanese yen, the dollar dipped 0.18 percent to 93.08 yen as a larger-than-expected U.S. trade deficit prompted investors to debate the strength of the recovery in U.S. manufacturing.

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Stocks fall with Alcoa; oil drops