Ultimate Market Recap: Alcoa Earnings Ahead, Disney Might Bid For the Dodgers

Monday Morning’s Top Stories

German (NYSEARCA:EWG) exports rose 2.5 in November from October’s 2.9 percent slump, according to the Federal Statistics Office in Wiesbaden. This exceeded economists’ forecast of a 0.5 percent gain. November imports fell 0.4 percent from October after a  a 0.1 percent rise. The country’s trade surplus expanded to EUR $16.2 billion ($20.6 billion) from October’s EUR $11.5 billion.

Don’t Miss: The Week Ahead on Wall Street: Alcoa and J.P. Morgan Earnings, Fed Beige Book.

General Motors Co. (NYSE:GM) and Ford Motor Co. (NYSE:F) reported record China car sales in 2011, surpassing Japanese rivals affected by the Thailand’s floods and the March 11 earthquake. In statement by GM, the company said deliveries to fast-growing Chinese dealers rose 8.3 percent from the previous year to 2.55 million vehicles while Ford reported its sales grew 7 percent to 519,390 cars.

Last week, Toyota Motor Corp. (NYSE:TM), Japan’s largest carmaker, said that its China sales rose in 2011 at the slowest pace since 2004. New wasn’t great for Honda Motor Co. (NYSE:HMC) either: it reported its first ever annual decline in China deliveries.

Alcoa (NYSE:AA), will kick off the fourth quarter earnings season today. Last week, the company announced major restructuring charges and analysts now expect that fourth quarter earnings per share will drop to $0.01 from 2010′s $0.24. This comes in lower than September’s $0.28 estimate as the weakening global economy has spurred a declining demand for aluminum, rising energy cots and lower prices. Alcoa revenue is expected to increase to $5.78 billion from $5.65 billion.

Investing Insights: Aloca Kicks Off 2012 Earnings Season with These Expectations.

Google Inc. (NASDAQ:GOOG) would really like to see its Google TV succeed and has made deals with numerous vendors to include Android as part of their TVs by paying them to do so. According to Neonwin.net, Google will add dollars for the vendors to include Android but the specific amount is unknown. The company is already extending its reach with Google TV as Lenovo (LNVGY) plans to include Android 4.0 with a new line of their televisions to be launched this year.

Monday Morning Hot Stocks

Shares of Southwest Airlines Co. (NYSE:LUV) are gaining attention after saying that it flew 8.2 billion revenue passenger miles last month, which relatively flat from prior year numbers.  Airline competitors include: United Continental Holdings (NYSE:UAL) and Jetblue Airways Corp. (NASDAQ:JBLU).

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With the Consumer Electronics Show booting up this week, these stocks will be in play. Intel Corp. (NASDAQ:INTC), Qualcomm Inc. (NASDAQ:QCOM), Nvidia Corp (NASDAQ:NVDA), Nokia Corp. (NYSE:NOK), Google (NASDAQ:GOOG), and Apple (NASDAQ:AAPL). Microsoft (NASDAQ:MSFT) and Sony (NYSE:SNE) are also expected to make waves in the next-gen console industry.

Shares of Walt Disney Co. (NYSE:DIS) are slipping .35 percent early Monday morning.  According to the Los Angeles Times, Disney could be about to make a bid for the LA Dodgers.

Bristol Myers Squibb Co. (NYSE:BMY) is trading .76 percent lower after announcing it has agreed to purchase hepatitis C drug developer Inhibitex, Inc. (NASDAQ:INHX) for an all-cash deal of $2.5 billion, or $26 per share.

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Monday’s Trending Stocks

Today the Financial Select Sector SPDR (NYSEARCA:XLF) is outperforming the major indexes, up 0.3 percent. New rumors about Basel compliance and some executive changes are especially influencing these companies.

Bank of America Corporation (NYSE:BAC) lets go about 20 percent of the managing directors in its Asian investment banking division, as part of an effort to cut expenses in the currently less-than-lucrative region. More than just a thinning out, an executive recruiter says, “That sounds like carnage.” Bank of America Corporation shares are up 1 percent today.

A memo from Morgan Stanley (NYSE:MS) CEO James Gorman says Eric Grossman will replace Frank Barron as the firm’s chief legal officer, according to the New York Times. Meanwhile, Patrick Lynch, Morgan Stanley’s head of European credit sales and trading, is leaving the bank, reports Bloomberg citing two people familiar with the matter. The Wall Street Journal reports that at least five employees of Deutsche Bank’s (NYSE:DB) institutional client group and fewer than 10 from Morgan Stanley’s Australian institutional equities division have been let go. The cuts are part of broader restructuring plans at both companies.

The Nikkei reports that on Tuesday Citigroup Japan (NYSE:C) is expected to promote Vice Chairman Masatsugu Nagato to chairman.

Here’s how shares of Bank of America, Morgan Stanley and Citigroup are reacting in trading action:

Bank of America Corporation (NYSE:BAC): BAC shares recently traded at $6.25, up $0.07, or 1.13%. They have traded in a 52-week range of $4.92 to $15.31. Volume today was 163,870,500 shares versus a 3-month average volume of 261,447,000 shares. The company’s trailing earnings are $-0.31 per share.

Morgan Stanley (NYSE:MS): MS shares recently traded at $16.17, up $0.27, or 1.7%. They have traded in a 52-week range of $11.58 to $31.04. Volume today was 11,180,252 shares versus a 3-month average volume of 33,298,600 shares. The company’s trailing P/E is 10.60, while trailing earnings are $1.53 per share.

Citigroup, Inc. (NYSE:C): C shares recently traded at $29.05, up $0.5, or 1.75%. They have traded in a 52-week range of $21.40 to $51.50. Volume today was 22,534,914 shares versus a 3-month average volume of 57,108,500 shares. The company’s trailing P/E is 7.74, while trailing earnings are $3.75 per share.

Market Recap

Markets closed up on Wall Street today: Dow +0.27%, S&P +0.23%, Nasdaq +0.09%, Oil -0.14%, Gold -0.40%.

On the commodities front, Oil (NYSE:USO) fell slightly to $101.42 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) falling to $1,610.30 an ounce while Silver (NYSE:SLV) climbed 0.76% to settle at $28.90.

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Today’s markets were up because:

1) Earnings. Though the three major indexed finished positive, markets were relatively flat today as investors awaited the next big driver: earnings season. Alcoa (NYSE:AA) kicks off the quarterly reports season after the closing bell, with analysts expecting the company to report big drop in profits. Overall, earnings for S&P 500 companies are expected to be up 7.5 percent in the final three months of 2011.

2) Europe. Though earnings are expected to have increased last quarter as the U.S. economic recovery picked up and unemployment declined, investors remain nervous about the debt crisis in Europe. After meeting on Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy said that progress has been made on a so-called “fiscal compact” that would enforce stricter budget discipline in the euro zone.

3) Economy. Though the euro remained near a two-month low today, the correlation between U.S. stocks and the euro seems to be breaking down as investors focus more on economic fundamentals. Consumer credit increased at an annual rate of $9.9 billion in November to $20.4 billion, the Federal Reserve reported today.

BONUS: U.S. Companies Face Slowing Growth as European Crisis Impacts Global Sales

After Hours Radar Stocks

Shares of Alcoa Inc. (NYSE:AA) are trading .48 percent higher after reporting a fourth quarter loss of 3 cents per share, inline with estimates.  Revenue of $5.99 billion came in higher than the $5.70 billion expected.

Juniper Networks Inc. (NYSE:JNPR) are trading down 2.4 percent in late trading.  The company reduced its earnings for the fourth quarter from 32-36 cents, to 26-28 cents.  The company reports full results on January 26.

Investor Insight: Can Precious Metals Overcome U.S. Dollar Strength?

WD-40 Co. (NASDAQ:WDFC) is attracting attention after saying fiscal first-quarter earnings dropped 25 percent due to higher input expenses.

Shares of Standard Microsystems Corp. (NASDAQ:SMSC) closed 1.5 percent lower on Monday, and continues to fall in extended trading.  The company also reduced earnings from 30 cents to a loss of 13-21 cents per share.

Credit card companies such as Visa (NYSE:V), Mastercard (NYSE:MA), Capital One (NYSE:COF) and American Express (NYSE:AXP) are happy to hear that consumer credit in November made the largest jump in a decade.  According to the Federal Reserve, consumer credit increased to $20.4 billion.

Don’t Miss: Alcoa Inc. Earnings: Margins Shrink as Costs Rise.

To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com