Friday's negative jobs report is hanging over the stock market today as the markets opened lower Monday morning. Investors will look to corporate earnings of major companies this week as the second-quarter earnings season unofficially begins.
Even though some major companies such as Research in Motion Ltd. (Nasdaq: RIMM) and Nike Inc. (NYSE: NKE) have recently announced earnings, Alcoa (NYSE: AA) unofficially kicks off the market's second-quarter earnings.
Investors hope that earnings do not follow the disappointing trend set by RIMM and NKE, but many other companies have already issued lower guidance for the upcoming quarter. This does not bode well for the economy which is trying to shrug off manufacturing, jobs and consumer confidence reports that all point towards "Recession 2013."
Many analysts expect earnings to be weak across the board. Corporate profits are starting to feel the sting of economic concerns overseas and at home.
Later this week JPMorgan Chase (NYSE: JPM) and Well Fargo (NYSE: WFC) report their earnings as well as Google (Nasdaq: GOOG).
Troubles in Spain continue to impact the confidence of investors as the yield on the Spanish 10-year bond crossed the 7% mark again.
Along with Alcoa here are some other companies in the news today.
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Why U.S. Stocks Will Rise Above Weak Growth in Global Markets
After another lousy week, it's official: Global markets have suffered the worst late-spring setback since 1940 -- a May-June period when the Germans invaded the Netherlands, then marched into Paris, and Italy declared war on France and Great Britain. Just like that, seven decades ago, World War II was on, and markets went into freefall.
If stocks are as good at anticipating global calamity this time as they were in that horrible spring 70 years ago, we may be in for a terrible second half.
It's a bitter irony that so many of those old enmities are flaring up again on the Continent at this critical time. The European Union was created two decades ago at behest of the former Allies to prevent the Continent from sliding into armed conflict again, and the euro currency was later launched to cement the new political relationship.
But many centuries of deep-seated distrust are hard to negate with diplomacy and idealistic optimism, and now we see Europeans back at each others' throats in a flurry of recriminations over who is to blame for outrageous deficits, debts and defaults in the Eurozone -- and more importantly, who should pay for them.
To read about how Europe's turmoil could affect the U.S. economy, click here.
Stubbornly High Unemployment Shows U.S. Economy Still Plagued by "Jobless Recovery"
While a surge in corporate profits reflect an improving economy, several government reports show that the United States continues to be plagued by a lingering "jobless recovery."
Most analysts, including President Barack Obama, are predicting a strong May jobs report due out today (Friday) with more than 500,000 new jobs added to the U.S. economy.
"We expect to see strong jobs growth in Friday's report." Obama predicted in a speech in Pittsburg on Wednesday.
Question of the Week: Readers Respond to Money Morning's Corporate Profits Query
Corporate profits returned in full in the first quarter of the year, with company after company topping Wall Street estimates.
JPMorgan Chase & Co. (NYSE: JPM) raked in $3.33 billion in first-quarter net income. Ford Motor Co. (NYSE: F) beat analysts' estimates with a $2.1 billion profit. Apple Inc (Nasdaq: AAPL) brought in $3.38 billion.
"There is clear and broad-based improvement in the economic factors in the United States and around the world," said JPMorgan Chief Executive Officer Jamie Dimon. "It appears to be strengthening, not weakening. It is possible that they will strengthen enough to end up with a strong recovery."
We Want to Hear From You: Do You Think Booming Corporate Profits Are the Sign of a Strengthening U.S. Economy?
The past few weeks have pulled in one earnings report after another for 2010's first quarter, allowing a better look at the status of corporate profits. Most companies hoped for marked improvements after restructuring and cutting costs in the wake of the financial meltdown that gave balance sheets a beating. And they weren't disappointed: JPMorgan […]