Alcoa Slips to Close Week; Dow Sideways


Consistency ain't easy to come by in the markets. Still, the Dow Jones Industrial Average had been on a four-day win streak coming into Friday, and very nearly carried that momentum into the weekend. Ending less than a tenth of a point lower, at 14,865, Wall Street seemed to think that valuations were pretty fair, ahead of major earnings reports next week -- with a few exceptions:

Home Depot got a big boost from a Jefferies analyst today, who raised the price target on the stock by 33%. While today's 2.4% gains were good enough for tops in the Dow, it's simply more of the same for the do-it-yourself home improvement outlet, whose shares have added 45% in the last year. A recovery in the housing market remains the major upside catalyst, but the analyst also thinks management could increase share buybacks.

Fast food behemoth McDonald's , one of the 11 Dow components set to announce earnings next week, added 1.6% Friday, briefly reaching 52-week highs. The company brought back former executive Steve Easterbrook to manage its global brand today. While the position may sound like a breeze -- most consumers seem to have a pretty good idea of what they're getting from Mickey D's -- recent concerns from China about an avian flu health scare threaten to harm the company's image, and its growth in Asia.

Just the second Dow company to report earnings, JPMorgan shares slipped 0.6% after reporting results this morning. The largest bank in the U.S. reported pretty unimpressive loan numbers: commercial loans were up just 1.2%, and consumer loans actually declined 4.2% in the first quarter. Embattled CEO Jamie Dimon is also in danger of losing his status as chairman of the board, but that announcement may not come until next month.

Last and least-appreciating, shares of aluminum producer Alcoa lost 1.2% today. It kicked off earnings season on Monday, but results were pretty ho-hum, and the stock lost ground this week. Actually, earnings weren't too shabby -- in fact, they beat estimates -- but revenues fell, and Alcoa's projections for its own growth didn't register as realistic for some analysts.

Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospect and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant, simply click here now to get started.

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Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.The Motley Fool recommends Home Depot and McDonald's. The Motley Fool owns shares of JPMorgan Chase & Co. and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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