Stock Market Today: Why Citigroup and Alcoa Are on the Move
The Dow Jones Industrial Average has gained 77 points in premarket trading, suggesting a strong start to the stock market this week. World indexes rose across the board overnight, with Chinese stocks posting a 1% gain and European shares up by about 0.5% as of 8:30 a.m. EDT. There isn't much on today's economic calendar that should move markets. But Citigroup and Alcoa stocks are both trading heavily this morning on fresh earnings news.
Citigroup investors have plenty of new information to digest today. The bank this morning posted second-quarter earnings results that beat expectations, and Citigroup also announced a $7 billion legal settlement with the Department of Justice. Excluding the significant costs of that agreement ($3.8 billion sliced from net income), the bank earned $1.24 per share in quarterly profit, which was well above the $1.05 Wall Street analysts were expecting. Revenue fell much less than expected, slipping 6% year over year to $19.3 billion, whereas analysts had been bracing for $18.9 billion in revenue. CEO Michael Corbat said in a press release that Citi's results showed "resilience in the face of an uneven economic environment," and he highlighted the bank's improving capital position. Citigroup's Tier 1 common ratio grew to 10.6%, which bodes well for management's plans to boost the company's dividend payout. The stock was up 4% in premarket trading.
Alcoa announced today that it just secured a $1.1 billion deal to supply engine parts to United Technology's Pratt & Whitney over the next decade. The agreement breaks lots of new technical ground, delivering the first-ever aluminum fan blade to be fitted on a jet engine. According to Alcoa CEO Klaus Kleinfeld, the special design and advanced materials helped the company "crack the code on forging an aluminum fan blade that is lighter and enables better fuel efficiency" while keeping costs in check. The metals giant will be sourcing aluminum for the deal from its Pennsylvania and Indiana factories, and the sales should help give a lift to its aerospace business, which is expected to grow significantly this year. Today's deal makes that growth even more likely. Alcoa's stock was up 2% in premarket trading.
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The article Stock Market Today: Why Citigroup and Alcoa Are on the Move originally appeared on Fool.com.Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool owns shares of Citigroup. 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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