Alcoa (AA) Earnings Report Boosts Index ETFs

Alcoa’s (AA) moderately positive earnings report released Tuesday night seemed to push stocks and index ETFs back into the green yesterday. The SPDR S&P 500 ETF (SPY) gained .25%, the SPDR Dow Jones Industrial Average ETF (DIA) gained .49%, the PowerShares QQQ Trust Series 1 ETF (QQQ) added .38%, and the iShares Russell 2000 Index ETF (IWM) rose .49%.

Index ETFs likely reacted to the positive Alcoa (AA) earnings report released Tuesday, which unofficially started the Q4 2012 earnings season. The Alcoa (AA) report beat expectations, and investors are widely anticipating the release of the Wells Fargo (WFC) report this coming Friday. After a tough 2012 of volatility, Federal easing, and weak economic reports, many think this earnings season could still be disappointing, but so far, Alcoa (AA) has held strong.

No economic reports were released yesterday, further supporting the notion that index ETFs are largely riding on earnings seasons results. Unfortunately however, German industrial production rose only .2% in the month of November, again showing the signs of a European recession in full swing.

Today and Friday could shake things up a bit, as we have new weekly unemployment claim numbers along with wholesale inventories today, and of course we have trade deficit, federal budget, and the all important release of the Wells Fargo (WFC) earnings report this Friday.

And don’t forget the upcoming debt ceiling debate and sequestration battles. I think it is good that markets rose .40% on average today before the real drama hits town.

Bottom Line: Alcoa’s (AA) Q4 2012 earnings report likely boosted stocks and index ETFs today, although things could change tomorrow with new unemployment claims and the Wells Fargo (NYSE:WFC) earnings report this Friday. Stay tuned.

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