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Hot Stock Minute: Earnings Season Kicks Off; Nikkei Up, Up, and Away

Dan Berman
Hot Stock Minute

Will Alcoa (AA) be a metal winner? The company kicks-off earning season this afternoon. But the forecast for S&P 500 companies is not too sunny. Analysts surveyed by Thomson Reuters expect earnings to be up just 1.5% percent in the last quarter. That's down from a 4.3% forecast at the start of the year. As for Alcoa, expectations are low with a slump in aluminum prices to blame. The company is expected to post a profit of 8-cents a share, down from 10-cents a year ago. And sales are likely to be down nearly 2% Despite the recent stock market rally, Alcoa is down 5% year-to-date. In fact the company is trading near its 52-week lows, and has failed to gain any momentum since late 2011.

The Nikkei resumed its incredible climb today on a weaker yen. The index rose to its highest level in intraday trading since August 2008. Later it fell back a bit, but still closed the day up 2.8%. As for the yen, it sank to a 4 1/2 low. All this is a result of the Bank of Japan's quantitative easing, which is meant to curb deflation. By the way, head of the IMF, Christine LaGarde, is currently in China, where she praised Japan's efforts saying they are good for the global economy.

Treasury Secretary Jack Lew is hop-scotching around Europe. Lew is on a two-day, four-city tour, meeting with various foreign ministers. He's expected to push them to pursue a course of more growth and less austerity as a way out of the euro crisis.


Lufkin (LUFK) is up nearly 40% in premarket trading. It was just announced this morning that General Electric (GE) is buying the company for $3.3 billion. Lufkin is an oilfield services provider. GE's offer for the company comes in at $88.50 a share. That's a 38% premium on the stock's price as of Friday. These pre-markets transactions put the stock at its 52-week high.

Next up we have Las Vegas Sands (LVS) which is coming off a losing week. Company Chairman Sheldon Adelson will be back on the stand today in a trial over the company's rapid expansion in Macau. A former consultant for Sands says the company owes him $328 million for helping to obtain a license in the gambling mecca. That consultant was previously awarded $44 million by a jury, but their decision was later overturned.

Now, there's a tale of two different pharmaceutical companies-- both small, but moving big-time. We start with BioCryst (BCRX) which is up more than 20% in premarket trading following a 29% climb on Friday. The company makes an intravenous anti-flu vaccine. China's government quickly approved the drug because of the bird flu outbreak. The vaccine is made for patients who can't take drugs orally or inhale them. Even with the climb, BioCryst is well off its 52-week highs which it hit back in October.

The other drug-maker making massive moves is Rigel (RIGL). It's up a few percentage points in premarket trading following a 40% plunge on Friday. Shares dropped on mixed news about a drug the company is testing with AstraZeneca. The medication was shown to improve symptoms of rheumatoid arthritis. But X-rays failed to spot any improvement in joint damage. Rigel has certainly seen better days. Shares were over $11 last summer.