Stocks spent most of the day in the red. But they turned around mid-day and staged a nice rally.

First the scoreboard:

Dow: 14,613, +48.1 pts, +0.3 per cent
S&P 500: 1,560, +9.7 pts, +0.6 per cent
NASDAQ: 3,222, +18.3 pts, +0.5 per cent

And now the top stories:

  • There was much market-moving news coming out of the U.S. today.  For the most part, investors seem to be positioning themselves ahead of earnings season, which unofficially kicks off with aluminium giant Alcoa after the closing bell today.
  • Analysts expect Alcoa to post Q1 earnings of $0.08 per share, which is down 19 per cent from a year ago.  This is largely due to falling aluminium prices.  Because it’s considered to be a decent bellwether of economic activity, investors and economists will be interested to hear what they have to say about global demand.
  • “[R]ecent history shows that when Alcoa has beat estimates, the price of the index has increased about 80% of the time over the next three months,” wrote FactSet’s John Butters who reviewed the company’s last 40 earnings announcements. “When Alcoa has missed estimates, the price of the index has actually increased nearly as often as it has decreased over the next three months.”
  • Analysts hope companies will address a lot of questions as they roll out their earnings announcements this season.  We’ll be interested to see how much fiscal uncertainty impacted the spending and investing behaviours of consumers and businesses.
  • “Our view is that a sharp market correction only happens if people fear a BIG decline in earnings, not a small one that they view makes future results more achievable,” wrote Morgan Stanley’s Adam Parker.  “We think April earnings and July guidance will continue to be muted, but we don’t think real fear about earnings will grow to the point we get a material stock market correction.”
  • Don’t Miss: The American Manufacturing Renaissance Is A Flop >

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