Stocks Edge Higher Ahead of Q2 Earnings Season

Monday, July 12, 2010
Stock Market Commentary:

The major averages closed higher after spending most of the day trading between positive and negative territory. Volume, a critical component of institutional sponsorship, was mixed: higher on the Nasdaq and lower on the NYSE. There were 21 high-ranked companies from the Leaders List that made a new 52-week high and appeared on the BreakOuts Page, higher than the 16 issues that appeared on the prior session. Decliners led advancers by nearly a 2-to-1 rato on the NYSE and over a 2-to-1 ratio on the Nasdaq exchange. New 52-week highs outnumbered new 52-week lows on the NYSE but trailed on the Nasdaq exchange. It remains critically important for leadership (new highs) to expand if the new rally effort will prove to be a sustained market advance. If not, Wednesday’s strong move may turn out to be the latest in a string of failed rallies confirmed with follow-through days.

 Q2 Earnings Season Officially Begins:

Earnings season officially began after Monday’s closing bell when Alcoa Inc. (AA), the first dow component, released their Q2 results. The largest US aluminum company was profitable in Q2 and said sales rose +22%. Over the next few weeks, it will be very interesting to see how company’s fared last quarter and, equally important, to see how the market reacts to the numbers. Analysts believe that Q2 earnings for S&P 500 companies rose +34%. This week alone, there will be approximately 23 companies in the S&P 500 that are slated to release their results.

Market Action- Confirmed Rally:

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