Alcoa's earnings are coming: Brace yourself

Alcoa Inc. (AA) will kick off earnings season late Wednesday when it will be the first Dow component to deliver quarterly results. The aluminum giant's results have often been seen as an indicator to the state of the overall economy. Investors wonder what the implications will be if Alcoa posts a big loss and shows no uptick in demand. And with Wall Street bracing for yet another tough earnings season, Alcoa's report also are seen as a precursor for what's in store for corporate profits.

As it is, the profits of the S&P 500 index companies are expected to decline by 34 percent in the second quarter on a year-over-year basis, according to data compiled by S&P and Bloomberg. That's about the same as the 33 percent drop in the first quarter. Things start looking a little better in the third quarter, when profits are expected to fall "only" 21 percent and profits may actually rise in the fourth quarter which, would look downright terrific especially when compared to the dismal fourth quarter of 2008. Investors' nervousness ahead of the earnings season is understandable then, and Alcoa bares the burden of being first. Fitting, with its AA ticker symbol.