Earnings season got off to a bad start with the Dow Jones Industrial Average (DJIA) stocks down over 145 points in early trading, a drop of more than 1.15% to take it under 12,110.
Alcoa (NYSE:AA) was down by more than 2%, about 35 cents, trading under $16 a year. Global economic weakness concerns are bringing Alcoa down despite better earnings as there will be less demand for aluminum. While up almost 4% for the year, Alcoa closed down on Friday. Alcoa is the third largest aluminum producer in the world; and the price of the metal has fallen to about $2510 a ton on the London Metal Exchange, down from $2770 in late April.
Financial stocks continue to be the poorest performers in the Dow, with both Bank of America (NYSE:BAC) and JP Morgan (NYSE: JPM) down over 2%. It is estimated that it will cost financial institutions $20 billion to settle mortgage claims.
Bank of America lost over 25 cents a share in early trading, to go under $10.43. Bank of America stock has been down 4 of the last 5 trading days, losing over 5.5% a share during that period. It is down more than 21% for the year. The relative strength index for Bank of America is 38.40, with 30 considered the benchmark for a stock being oversold.
Off about 2.5%, JP Morgan was under $40, lower by more than $1 per share. JP Morgan is down over 4% over the last 5 days. For the year, JP Morgan is down over 6.2%. The relative strength index for JP Morgan is 42.40.
Also down by more than 1% in early trading was Merck (NYSE: MRK), United Technologies (NYSE: UTX), Walt Disney (NYSE: DIS), Verizon (NYSE: VZ), Microsoft (NASDAQ: MSFT), 3M Corporation (NYSE: MMM), Caterpillar (NYSE: CAT), Chevron (NYSE:CVX) and ExxonMobil (NYSE: XOM).
Fighting back on The Big Board and the only stock on the Dow higher in the morning session was McDonalds (NYSE: MCD), gaining more than 10 cents, over a 0.10% gain to over $85.70. Up over 11% for the year, McDonalds is trading above its 20, 50 and 200 day moving averages. The relative strength index for McDonalds is 72.40, with 70 the ceiling for a stock to be considered overbought.
