Talks among euro-zone finance ministers on how to bail out the Spanish banking system and create a common regulator for the region’s banks failed to impress investors. Yields on Spain’s benchmark 10-year bond rose to about 7%, a level than economists say is unsustainable. European markets were mostly lower, with the Stoxx Europe 600 slipping -0.4%. Adding to concerns, data over the weekend showed that inflation eased in China last month as demand cooled.

Before their earnigns report at the close, shares of Alcoa eased. The blue-chip aluminum company is to report second-quarter results after the closing bell, marking the unofficial kick-off of the reporting season. Many investors are worried that these next few days of earnings will be a major indicator of a global slowdown and the beginning of another crisis. 

In other corporate news, Amerigroup surged after the health insurer said it agreed to be acquired by WellPoint for $4.46 billion in cash. WellPoint shares gained, posting the second-biggest increases in the S&P 500. The index’s health-care sector was one of just two of its 10 groups to rise as Amerigroup rivals such as Centene and Molina Healthcare also advanced. In other deal news, FX Alliance leapt after the electronic currency-trading platform entered into a deal to be bought by Thomson Reuters for $616 million. Finally, Facebook (FB) rose after agreeing to settle patent litigation with Yahoo, drawing an end to a nasty but ultimately short-lived dispute that had roiled Silicon Valley.

– Still, YUM like many of the other companies mentioned herein, has come under pressure of late, falling 15% since marking its 52-week high earlier this spring. The problem is the same mentioned for the other legends herein, deteriorating Europe and slowing Chinese economic growth.

Alcoa (AA)

According to the company website Alcoa is the world’s leading integrated aluminum company, providing jobs to 61,000 employees across 31 countries. Alcoa’s main competitors in the metals and mining industry are Aluminum Corp. of China (ACH)
and Alumina (AWC). The company has been an integral part of the advancement of aerospace, automobiles and industrial markets. Which is why the company benefited greatly when the factory order report was released and it was announced that the orders had increased for the first time in three months. On the other hand though when payroll was released today and the numbers were lower than the forecasted growth the company took a hit.

As for the earnings report next week the current estimate shows a 78.1% decrease from last years second quarter when Alcoa reported earnings of 32 cents per share. This is partly due to the decrease in stock price from $9.60 to $8.90. Despite all these negative statistics, Alcoa is trying to build on four straight revenue increases. Which could be possible with the company’s announcement that it had reached an agreement to sell its 351-megawatt Tapoco Hydroelectric Project to Brookfield Renewable Energy Partners. This sale could boost earnings at the last minute and keep Alcoa’s quarterly revenue increase streak going.

S&P 500 futures fell 7.75 points to 1344.00, Dow Jones Industrial Average futures fell 84 points to 12643.00, and NASDAQ futures fell 12.75 points to 2596.25.

David Cornes holds a degree in economics from the University of Montana.

Amerigroup, a fortune 500 company,  specializes in serving patients that receive benefits through programs such as Medicaid and Medicare. Wellpoint’s acquisition of AGP would help both companies become more efficient in offering services to senior, disabled and patients with long-term needs. Wellpoint serves over 34 million people through their health plans and an additional 62 million people through its subsidiaries.

For our daily stock update, the S&P 500 is down 0.94% as well as the 10-year treasuries, which are down 1.94%. Oil on the other hand is up 0.57% and the dollar is down 0.26%.

So what do you need to watch for today? Earnings reports. Today is the official start of earnings season with Alcoa the first to announce after the close today.
Unfortunately it doesn’t look like many companies will post earnings increases causing the Dow and S&P 500 to go down an estimated 0.4%.

That’s all for today, make sure to follow us on Twitter @keeneonmarket and check out our new Sunday webinars!

I remain bearish on the ES as stock futures took a dive after this mornings 7:30 am CDT jobs number and continued to fade throughout the day, to slightly rise near the close. EUR/USD futures fell about 30 pips following the release, falling to a total of 112 pipps into the afternoon, hitting new lows of $1.2271. I feel that $1.23 was a key support level for the Euro and am curious to see how the $1.22 level will be tested.

Monday is a big day for earnings as Alcoa (AA) kicks off the Q2 earnings season with a negative outlook. Analysts’ consensus is that there is an oversupply in aluminum without guidance for higher demand.