Ultimate Market Recap: Alcoa, Sears Holdings, and Banks Gone Wild

Today’s Top Stories

Alcoa Inc.’s (NYSE:AA) third quarter profits disappointed market expectations on Tuesday with its $172 million profit (15 cents a share). This compares to the $61 million profit (6 cents a share) from the previous year. The consensus forecast had been 22 cents a share. In premarket trading, the stock is off 4.3%. Don’t Miss: Your Cheat Sheet to Alcoa Earnings.

Greece may be able to avoid debt default if the July 21 EU summit decisions are implemented by European countries. In an interview, European Central Bank President Jean Claude Trichet said:

“The commitments made by Greece and those made by all the European countries on July 21 should enable [a Greek default] to be avoided, and we have always warned the governments against it,” Trichet told French newspaper L’Express.

Trichet added that the European states must be ready” to “increase the effectiveness” of the euro-zone’s rescue fund “through recourse to a leveraging effect.”

After Parliament’s blocked ratification on Tuesday, Slovakia’s ruling coalition parties are scheduled to hold talks today on an agreement to expand the eurozone’s EFSF rescue fund. A second vote, which is likely to pass, may be held on Thursday.

Investing Insights: The Eurozone Lights a Fire Under Gold and Silver.

Hewlett-Packard’s (NYSE:HPQ) new CEO Meg Whitman is rethinking a proposal to split the company into two. Upon conducting an analysis to spin off its personal-computer division, the costs may outweigh the benefits.

Don’t Miss: Cloud Computing: Your Cheat Sheet to the Cloud Business Landscape.

Worldwide BlackBerry (NASDAQ:RIMM) owners are suffering from a third consecutive day of service disruptions. Problems have now spread to Asian users including Japan, Hong Kong, Singapore and India. European subscribers had previously reported email, messaging and browser problems on their handsets.

Bonus: Joe Biden announced today that he will run with President Obama on the 2012 ticket.

Early Morning Hot Stocks

Liz Claiborne (NYSE:LIZ) is ripping 40% higher in early trading after the company announced it is selling several brands including its namesake label for $328 million in cash.  J.C. Penny (NYSE:JCP) will buy the Liz Claiborne and Monet brands while Bluestar Alliance will acquire the Kensie brand.  Liz Claiborne has also sold its Dana Buchman label to Kohl’s (NYSE:KSS).

Shares of Pepsico, Inc. (NYSE:PEP) are bubbling nearly 2% higher before the opening the bell.  The drink and snack company reported that its third-quarter profit climbed to $2 billion ($1.25 per share), compared to $1.92 billion ($1.19 per share) last year.  Competitors to watch in today’s trading include Coca-Cola (NYSE:KO), Dr Pepper Snapple (NYSE:DPS), and Hansen Natural Corp (NASDAQ:HANS).

Investing Insights: The Dow’s Fantastic 6 Stocks.

Hewlett-Packard (NYSE:HPQ) is climbing 1% higher after the company said it is pairing up with Conde Naste to offer on-demand magazines such as Allure, Gold Digest, Wired, and Allure to internet-connected printers.  Meg Whitman, the new CEO, is also reconsidering spinning off the company’s personal PC business.

Shares of Alcoa (NYSE:AA) are taking a 4% hit in early trading after the company missed Q3 estimates.  For the third quarter, the aluminum company posted a profit of $172 million (15 cents per share), but analysts were expecting the company to earn 22 cents per share.  Other aluminum companies such as Century Aluminum (NASDAQ:CENX) and Noranda Aluminum (NYSE:NOR) are also trading lower on the news.

Research in Motion (NASDAQ:RIMM) is 1% lower after as its BlackBerry service experiences technical difficulties Wednesday morning.  The company said the problem has been fixed but it could take some time for the network to work through the backlog of data.

This Afternoon’s Trending Stocks

As the DJIA is up 186 points to 11,602 and the S&P 500 is up 21 points to 1,216, here are some steamy stocks shaking it up in the markets:

  1. ADTRAN Inc. (NASDAQ:ADTN): Shares of ADTRAN Inc. are trading lower over 3% today. Investors appear to be taking profits as the company delivered strong double-digit top line growth. ADTRAN, Inc. designs, develops, manufactures, markets, and services a variety of high-speed digital transmission products. The Company’s products are used by telephone companies and corporate end-users to implement advanced digital data services over existing telephone networks. ADTRAN also offers a line of multiplexers which provides modular flexibility.
  2. Pepsico Inc. (NYSE:PEP): Shares of Pepsico Inc. are trading higher almost 4% today following a very impressive quarterly earnings report and 13% revenue jump. PepsiCo, Inc. operates worldwide beverage, snack and food businesses. The Company manufacture or uses contract manufacturers, market and sell a variety of grain-based snacks, carbonated and non-carbonated beverages and foods in countries throughout the world.
  3. Alcoa (NYSE:AA): Shares of Alcoa are rebounding with today’s rally after being down 3.5% earlier in the day. The company delivered strong double-digit revenue growth, but missed analyst expectations. Maybe people realize that 20+% revenue growth is not a recessionary statistic. Alcoa is a global producer of aluminum. It is mainly engaged in the production and management of primary aluminum, fabricated aluminum, and alumina combined. It is actively involved in a range of industries, including technology, mining, smelting, and recycling.
  4. Sprint Nextel Corporation (NYSE:S):Shares of Sprint are higher over 11% today as Blackberry hits a bump in the service road this morning. Also, the Apple deal with Sprint is proving to be a high demand mover as consumers continue to hit the Sprint website for the Apple iPhone 4S. Sprint Nextel Corp. offers a range of wireless and wireline communications products and services.
  5. Netfix (NASDAQ:NFLX): Shares of Netflix are up over 5% today after reversing its PR disaster downturn with investors. Netflix, Inc. provides subscription service streaming movies and TV episodes over the Internet and by mail.
Market Recap
Markets closed up on Wall Street today: Dow +1.24%, S&P+1.04%, Nasdaq +0.89%, Oil -0.94%, Gold +1.07%.

On the commodities front, Oil (NYSE:USO) fell to $85.00 a barrel. Precious metals were up, with Gold (NYSE:GLD) climbing to $1,678.70 an ounce while Silver (NYSE:SLV) rose 2.02% to $32.65.

Hot Feature: The Dow’s Fantastic 6 Stocks

Today’s markets were up because:

1) Europe. European Commission president José Manuel Barroso today urged policymakers to act immediately to resolve the euro zone’s sovereign debt crisis, saying that banks should temporarily raise capital reserves, and that those not satisfying capital requirements should be barred from paying out dividends and bonuses. Meanwhile, Slovakia, the last holdout in the 17-member euro zone, is now expected to pass a measure to increase the powers of the European Financial Stability Facility, increasing the fund’s effective lending capacity to 440 billion euros, giving it the power to inject capital into banks, and allowing it to buy the bonds of distressed governments on the open market.

2) Fed. Minutes from a Federal Reserve policy meeting September 21-22 were released today, showing that policymakers are considering a third round of bond purchases, or QE3, in the near future. Of course, the Fed ultimately decided to shift $400 billion of its investments to longer-term Treasuries, but today’s report shows that the Fed might at least be open to QE3 in the future. 

3) Banks. Markets climbed into the green again today for the first time since August 31 as they continued to rally from their October 3 low. Leading them to those gains were financials. All 10 groups in the Standard & Poor’s 500 Index rose, with Wells Fargo (NYSE:WFC) adding 3.45% and Citigroup (NYSE:C) adding 4.96%, following European lenders higher. Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Barclays (NYSE:BCS), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) were also trading higher today.

After Hours Radar Stocks

After gaining 6.21% during regular trading, shares of American International Group (NYSE:AIG) continue to attract attention.  The company announced late Wednesday that it has secured two new credit facilities totaling $4.5 billion to replace existing facilities.

Super Hot Feature: Are Big Fat Banker Bonuses About to Vanish?

MetLife (NYSE:MET) is heading slightly lower in extended hours after the company said it is seeking to sell its forward mortgage business so it can focus on its core insurance and employee benefits businesses.  The company competes withAIG and Prudential Financial (NYSE:PRU).

Akamai Technologies (NASDAQ:AKAM) is jumping nearly 10% as rumors swirl that Google (NASDAQ:GOOG) may purchase the company. Akamai is one of the few stocks that survived the dotcom bubble.

Shares of Sears Holdings (NASDAQ:SHLD) are up more than 5% after the closing bell.  The department-store chain hired a firm to help it license its Craftsman tool, Kenmore appliance, and DieHard battery brands.  Sears would receive a fee to use its name on the products.  The company also competes with Target (NYSE:TGT) and Wal-Mart (NYSE:WMT).