Dow Futures

After falling 1.3% yesterday, the Dow Jones Industrial Average (INDEX: ^DJI  ) closed the week down 1.4%. The red ink was thickest for these three names:

Caterpillar and Bank of America plunged after yesterday’s mediocre jobs report. When jobs are scarce and employers stingy on wages, it becomes harder to pay off household and consumer debt. Two-thirds of B of A’s loans — $600 billion — fall into these categories, so the bank should have a strong interest in full employment. Though JPMorgan Chase (NYSE: JPM  ) , which plunged 3.7% this week, has more extensive trading and investment banking operations than B of A, it of course has quite a bit of exposure to household and consumer debt, too.

It’s a similar worry for Caterpillar. It’s hard to get construction unless we see paychecks that allow consumers to buy things, or government spending picks up.

Unfortunately for Cat, unprecedented budget cutbacks — particularly at the state and local level — continue to decimate transportation construction. Transportation was one of the only sectors of the economy to actually lose jobs after state and local spending cuts subtracted 0.14 points from GDP. And you don’t ordinarily associate tech stocks with economic cyclicality, but Cicso does depend on government contracts for a big part of its business. The company reports quarterly earnings next Wednesday, so we’ll find out soon enough.

One mediocre jobs report doesn’t spell doom, but investors are clearly afraid of a three-peat to the past couple of years, where the recovery seemed strong but ultimately failed to pick up enough steam.

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The Dow Jones Industrial Average (INDEX: ^DJI  ) took a solid whacking today, sinking 168 points, or 1.3%. The drop was enough to give the Dow its worst week of 2012, with a loss of 190 points.

A disappointing jobs report ruled the day, as the Department of Labor reported that the economy added just 115,000 jobs in April, well short of expectations of 170,000. The unemployment rate ticked down to 8.1%, but that was because prospective workers dropped out of the job hunt, not because meaningful job growth put people back to work. The percentage of working-age Americans in the labor force actually dropped to its lowest figure in 30 years, and the percentage of men dropped to its lowest point since data on that figure started being collected in 1948. For the month, the private sector added 130,000 jobs, while 15,000 government jobs were shed. The April report marks the third consecutive month of declining job growth.

The news weighed heavily on the blue chips, as all 30 dropped during the session. Energy, tech, and financial sectors seemed to be the hardest hit. Oil prices slid nearly 4% to less than $99 a barrel, the lowest point in more than two months, on worries about the strength of the general economy. Chevron (NYSE: CVX  ) dropped more than 2%, while ExxonMobil was down just over 1%.

JPMorgan Chase (NYSE: JPM  ) and Bank of America (NYSE: BAC  ) were two of the biggest Dow losers, dropping about 3%. The big banks tend to swing more in reaction to macroeconomic news, but CLSA analyst Mike Mayo also helped send them down a few points. The analyst, who had downgraded Bank of America a few weeks ago, put JPMorgan on notice as well, dropping it by two notches to “underperform” from “outperform.” While Mayo called the bank “best in class,” he believes it would be more valuable if broken up because of mounting regulation that will hinder its synergies. He also cited macroeconomic uncertainty as a concern.

One diamond in the rough today was LinkedIn (Nasdaq: LNKD  ) , which jumped 7% after beating earnings and revenue estimates, the second straight earnings beat for the recent IPO. On the call, the company also announced plans to buy presentation service SlideShare for $119 million. LinkedIn’s strong performance could bode well for Facebook ahead of its expected IPO later this month.

Finally, elections in France and Greece over the weekend are likely to erase memories of the jobs report come Monday. Look for that to move markets at the start of next week.

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LONDON — The Dow Jones Industrial Average (INDEX: ^DJI  ) and the S&P 500 look set for a muted start, with pre-market trading suggesting a 12-point fall for the Dow.

Individual stocks that may rally this morning include Sunoco (NYSE: SUN  ) , which disclosed it is to be acquired by Energy Transfer Partners for $50 per share. Sunoco closed on Friday at $41.

New economic data that might impact today’s trading includes personal income and consumption figures for March, which are expected to show that income rose by 0.3%, and spending by 0.4%. February’s comparative figures were 0.2% and 0.8%, suggesting slightly weaker spending, perhaps due to rising inflation.

The latest Core PCI Price Index is also due and is expected to show an increase of 0.2% in March.

In Europe, news that Spain is back in recession contributed to a 0.6% fall in the country’s main IBEX 35 index, with the FTSE Eurofirst 300 and France’s CAC 40 also weakening in light trading through the morning. Germany’s DAX index bucked the trend, finishing the morning up by 0.1%.

In London markets also opened weaker, with the FTSE 100 (INDEX: ^FTSE  ) slipping 0.5% to 5,750 by noon.

Top UK risers against the trend included AstraZeneca (NYSE: AZN  ) and BHP Billiton (NYSE: BBL  ) . However, neither of these was the company that recently persuaded billionaire Warren Buffett to invest more than $1 billion. The legendary investor bought a famous British name with global expansion potential — and you can discover the name of the company and the price he paid in this latest free report.

Earnings season continues today, with NYSE Euronext unveiling first-quarter earnings slightly below expectations before the open and Anadarko Petroleum and McKesson Corporation due to reveal earnings after the market closes tonight.

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After a slew of earnings reports, the Dow Jones Industrial Average (INDEX: ^DJI  ) gained 1.6% this week.

But three stocks crushed the others:

So what’s going on with these companies?

AT&T
The cell giant barely grew its subscriber base this quarter and posted earnings of $0.60 per share, slightly above what analysts had expected. But what really had investors excited was that it and Verizon improved their margins by earning more from data plans.

That’s important because AT&T’s operating margins have fallen from around 17% to 13% over the past several years, and compressing margins is one of the biggest risks facing the major carriers. As Apple (Nasdaq: AAPL  ) iPhones become increasingly popular, the smartphone maker gains more market power over AT&T, Verizon, and Sprint Nextel to provide generous subsidies for its phones. Apple’s free cash flow was skewed $10 billion higher than net income over the past year, largely because of the impact of those massive subsidies.

Boeing
Boeing’s quarterly earnings rose 58% over the past year, and the company said it’s been able to reduce costs by about half for its new, long-awaited 787 Dreamliner planes since it began producing them. Margins and backlogs rose, and Dreamliner production is expected to increase to 10 per month by the end of next year.

American Express
Shares of AmEx soared last week after it posted a 7% earnings on a 12% increase in transactions. The card giants — Visa, MasterCard, AmEx, and Discover Financial Services — are hitting 52-week highs, with their businesses firing on all cylinders. Consumers are processing more of their transactions with cards instead of cash, and emerging-market growth is beginning to hit its stride. With 85% of transactions still done in cash, there’s still quite a bit of room for growth.

AT&T, Boeing, and AmEx crushed the market this week. If you’re looking for some other great blue-chip stock ideas, check out The Motley Fool’s “3 American Companies Set to Dominate the World.” In this special report, our analysts reveal three tantalizing stocks that are finding growth in emerging economies. You can access the report for for free. 

After a slew of earnings reports, the Dow Jones Industrial Average (INDEX: ^DJI  ) gained 1.6% this week.

But three stocks lagged behind the others:

So what’s going on with these companies?

Wal-Mart
Shares plunged afterThe New York Times revealed that the discount retailer had been systematically bribing Mexican officials to speed up approval of new store construction to get an advantage over competitors. The allegations aren’t particularly surprising, per se; what makes the 8,000-word piece so damaging is its thorough documentation of the bribes as well as the cover-up that seemed to extend up through the highest reaches of Wal-Mart management and how vital Wal-Mart’s Mexican operations have been to its growth.

Procter & Gamble
P&G reported a 16% decline in its net income, which wasn’t actually as bad as analysts had expected. But investors are more concerned about the company’s prediction that weak growth in developed economies, Venezuelan-mandated price cuts, and rising costs could pressure full-year earnings.

Caterpillar
Caterpillar reported a 29% surge in earnings, in large part because of its acquisition of Bucyrus. Although that topped analyst forecasts, it wasn’t enough for investors. Weakness in the market for construction equipment in Brazil and China meant that Cat sales came in lower than analysts had expected.

Wal-Mart, P&G, and Caterpillar were the worst performers this week, but it’s important for us to remember that it’s long-term performance, not daily price fluctuations, that ultimately matter to investor returns. If you’re interested in one stock that our chief investment officer picked to crush the market over the long haul, check out our brand-new report, “The Motley Fool’s Top Stock for 2012.” It highlights a company that is revolutionizing commerce in Latin America. For a limited time, you can get instant access to the name of this company — and it’s free. 

The Dow Jones Industrial Average (INDEX: ^DJI  ) followed European markets yesterday and slid down 0.78%. Today, a multitude of earnings — including those from Apple – along with a few housing reports could push the market one way or the other. Here’s a brief on what to expect.

A trio of Dow earnings
Dow components 3M (NYSE: MMM  ) , AT&T (NYSE: T  ) , and United Technologies (NYSE: UTX  ) will all release earnings today before the market opens. Analysts expect 3M, which has paid consecutive dividends over 95 years, and raised its annual dividend for 54 consecutive years, to earn $1.48 per share.

The market expects AT&T to report earnings in line with last year. This quarter, AT&T pushed the release of Nokia‘s Lumia 900, which exacts $100 less of a subsidy from the carrier than the iPhone 4S. A greater proportion of Lumias could help AT&T’s margins in the future.

United Technologies hopes to soon close its $16.5 billion acquisition of Goodrich (NYSE: GR  ) ; however, the European Commission has until Aug. 9 to decide whether to approve the deal that would give United Technologies a dominant market share in AC power generation. Analysts are expecting its earnings to improve over 5% this quarter from last year’s.

And the largest company in the world
Apple will also deliver earnings today, in a quarter where the new iPad was released, along with the iPhone 4S in China. As Bloomberg notes, Apple gained more than an IBM-worth of market value, or $250 billion, over four months. This earnings report will help investors judge whether this run-up was justified. Concerns around Apple include supply shortages of mobile chips, to Verizon‘s noting iPhone sales of only 3.2 million this quarter compared with 4.3 million last quarter, when the phone was released. However, the median price target for Apple sits at $700 per share, meaning several analysts still see a large upside to the stock.

Housing’s continuous recovery
Also today, the Case-Shiller Index for February and new-home sales for March will give investors clues to any hint of a housing recovery. The Case-Shiller 20-city Index, which measures home prices in 20 cities, fell 3.8% in January, and the market expects another decline of 3.4%. We are now seeing home prices around levels last seen in 2003:

Case-Shiller HPI: Composite 20 data by YCharts

New-home sales are expected to increase slightly from February’s 313,000 to 318,000 for March. Despite these less than bullish numbers, many professionals are now betting on a housing recovery, following Buffett’s words that for new families, “living with in-laws can quickly lose its allure.”

Europe’s hiccups
Yesterday, European markets fell on news that the eurozone purchasing managers index, or PMI, fell to 47.4 in April, down from 49.1 in March. Any number below 50 signifies an economic contraction, whereas above 50 signals expansion. Along with this, France’s electorate showed strong support for the opposition, which favors more spending, and the resignation of the Dutch prime minister around budget talks helped remove the bottom from markets. As Europe sorts out its issues, it will continue to affect markets worldwide.

Prepare for the rest of earnings season
There will be plenty more earnings reports later in the week from other Dow components: tomorrow, it’s Boeing and Caterpillar; Thursday, ExxonMobil; and Friday, CVS, Merck, and Procter & Gamble.

Stocks can jump or fall on any tidbit of news, but over the long term it’s the underlying business in which you invest and that drives solid long-term returns. Earnings reports are a great peek into how a business is performing, as well as how it might deliver over several years. To make the most of this round of earnings, check out our free report, “5 Stocks Investors Need to Watch This Earnings Season.”

The Dow Jones Industrial Average (INDEX: ^DJI  ) jumped a full 1.2% this week after several big-name companies reported strong earnings. But not every stock joined the party. These were the three worst performers.

Bank of America
B of A shares initially jumped after its earnings decline wasn’t as bad as analysts had expected. But while the bank set aside less money to cover repurchase claims on bad loans it sold investors, the amount investors are claiming reached a record high. Worse still, the Consumer Financial Protection Bureau, which isn’t captured on consumer issues like the OCC and Fed, is investigating nine banks’ overdraft fee practices. B of A recently had to settle charges that it had been artificially inflated the penalties its customers owed. Last year, banks charged their customers $31.6 billion in overdraft fees.

Intel
Shares of Intel fell after the company reported pretty decent earnings. The chip giant made $0.56 per share this quarter — higher than the $0.50 that analysts had forecasted, but not higher, perhaps, than what analysts and investors had hoped for. Sales were basically flat, but keep in mind that the quarter was 7% shorter than last year’s 14-week quarter. Intel is busily preparing its invasion of ARM Holdings and Qualcomm‘s (Nasdaq: QCOM  ) mobile space, buying up patents and inking partnerships with Google, Motorola Mobility, Lenovo, ZTE, Lava, and Orange.

IBM
IBM shares also fell after strong earnings results. Non-GAAP earnings rose 15% to $2.78 per share, and management raised its full-year outlook to $15 per share. Margins expanded, and free cash flow soared.

As Intel and IBM showed us this week, the stock market can push stocks up or down based on short-term noise and overly strict expectations. But that very fickleness is what creates bargains for those with an attention span longer than weeks or months. And with earnings season upon us, we can expect to see even more big moves and major opportunities for long-term investors. So check out “5 Stocks Investors Need to Watch This Earnings Season.” Our chief investment officer and top analysts all agree that these are the ones you don’t want to miss. Get free access to this special report.

Today was a pretty boring day when looking at the boarder markets. Coming off a week that should be described as anything but boring, the Dow Jones Industrial Average (INDEX: ^DJI  ) rose slightly today, gaining just less than 72 points on the day, or roughly 0.6%. Both the Nasdaq and S&P 500 ended the day in the red, falling 0.8% and 0.1%, respectively.

Macro news also came in mixed today. On the negative side, Spain’s borrowing costs rose above 6% for the first time since before the European Central Bank began intervening in global debt markets, indicating that investors still have their doubts about the viability of austerity plans in one of Europe’s largest economies. On the brighter side of things, U.S. March retail sales grew by 0.8%, coming in just shy of the 1% gains seen in February. This further bolsters the case that a strengthening consumer can continue to fuel the slow recovery in the United States, despite recent headwinds such as rising gas prices.

Around the market
Tech-specific stocks took a drubbing today. On the Dow, tech stocks represented three of the six stocks that fell in value during the trading session. After leading the Dow with a rare 6.3% gain last week, personal-computer juggernaut Hewlett-Packard (NYSE: HPQ  ) led the Dow downward today, posting a 1.1% decline. Although the company certainly did benefit in the first quarter from stronger-than-expected PC shipments and market-share gains, the again tech giant still has no adequate answer to address the rise of smart devices like the iPhone and Kindle Fire.

Similarly, both Cisco Systems (Nasdaq: CSCO  ) and IBM (NYSE: IBM  ) lost value on the day, albeit not quite to the degree of HP. They ended today down 6.3% and 0.04%, respectively. Big tech sold off heavily today, which probably played a role in dragging these blue-chip names downward.

Most surprisingly, Apple (Nasdaq: AAPL  ) also showed that it can’t defy gravity. Shares of the iDevice maker dropped 4.2% today, marking the fifth consecutive daily decline for what could fairly be called the market’s hottest stock thus far this year. With Apple having fallen nearly 10% from its all-time high, it seems investors have grown skeptical that the company can maintain its thunderous growth, despite having arguably the most enviable position in the burgeoning smart-device market. Even with its recent pullback, though, expect some heady growth numbers out of Cupertino when Apple announces its first-quarter earnings next week.

With earnings season picking up steam, investors need to stay vigilant for potential opportunities. And while we always advocate investing for the long term, earnings season can create plenty of opportunity for the intelligent investor. To highlight five stocks we think have a chance of winning big this earnings season (and for years afterward as well), the Fool recently detailed five stocks investors need to watch this earnings season in a free research report for our readers (spoiler alert: Apple makes the cut). Access your free copy today.

Monday gave investors a tale of two markets. On one hand, the big blue chips in the Dow Jones Industrial Average (INDEX: ^DJI  ) provided some solid gains, with the average closing up 72 points to 12,921. But the rest of the market wasn’t nearly as optimistic, with significant pressure from tech stocks pulling the Nasdaq down. Meanwhile, overseas markets were equally wishy-washy, with markets in Japan and the U.K. down but Germany and France rising.

Let’s look at three of the stocks that contributed to the Dow’s big gains today.

Travelers (NYSE: TRV  ) , up 1.8%
Last Friday, shares of Travelers took a hit when equity research firm Zacks downgraded the stock to underperform. The researchers pointed to losses from early snows in the Northeast last fall and weakness in its investment income resulting from low interest rates.

But today, Travelers made up all that last ground. As tough as last year was for the insurance industry, it’s time to look forward. A relatively mild winter should help the company post lower losses from the year-ago winter months. And although weather-related events will inevitably keep happening, Travelers could benefit greatly if it can avoid some of the devastating catastrophes we saw last year.

Procter & Gamble (NYSE: PG  ) , up 1.5%
Sometimes, all it takes to make investors happy is to give them a little more money. That’s what P&G did after the market closed last Friday.

The consumer giant boosted its dividend by 7%, with investors now slated to receive $0.562 every three months. The move marks the 56th consecutive year that P&G has raised its payout, putting it among the old-time elite among the Dividend Aristocrats. As investors start to fear a possible pullback, companies that have that kind of stability are worth more than ever.

Home Depot (NYSE: HD  ) , up 1.4%
Investors also like to see stocks hit 52-week highs. Home Depot made the list today as the stock received positive comments from an analyst.

Piper Jaffray argues that while most people focus on strength or weakness in the housing market as important for home-improvement retailers’ prospects, remodeling plans play at least as essential a role in profitability. The analyst believes that there’s more than enough growth for both Home Depot and Lowe’s (NYSE: LOW  ) , which it also upgraded today.

What’s next?
With the Dow up, the Nasdaq down, and investors confused, you have to keep your eyes open for any edge you can find. One key to success is paying attention to what companies say in their quarterly reports. To maximize your profit opportunities, let me invite you to get some insight from The Motley Fool’s brand-new special report, which identifies five stocks that investors simply have to watch this earnings season. The report is free, so get the scoop before these companies report.

The Dow Jones Industrial Average (INDEX: ^DJI  ) ended its five-day losing streak today, finishing up 89 points, or 0.70%, to rebound from its biggest loss of the year yesterday. The index was helped up by decreasing Spanish and Italian bond yields and hope that the European Central bank could possibly intervene and purchase bonds to ease stress in Spain.

Here are the Dow’s top three gainers today:

Perhaps the main reason for the Dow’s solid day was earnings from Alcoa. The aluminum giant reported after the closing bell yesterday and posted earnings of $0.09 per share, significantly higher than the $0.04 loss that analysts had expected. Alcoa also posted increased revenue of $6 billion, above the $5.77 billion that analysts were expecting. The company is considered a bellwether of the overall economy, because its aluminum is used in products that span all industries, everything from cars to planes to soda cans. Alcoa also reported solid growth in China and reaffirmed its forecast of 7% global growth in 2012.

Bank of America and JPMorgan Chase round out the top gainers on the day. As large banks, these companies are particularly sensitive to the overall economy. Bank of America in particular illustrated the point, as the company has dropped more than 10% just in the past five days before today, and more than 4% yesterday alone. But today’s positive news helped drive the stock up 3.75%, and the company’s share price has now appreciated almost 60% in 2012 alone.

Outside the Dow, Internet media company Travelzoo (Nasdaq: TZOO  ) surged a whopping 28% on the day after news broke that it has sought an advisor for a possible sale of the company. The company boasts 24 million subscribers and could be attractive for companies looking for a presence in the high-end Internet-deals segment. Names already being thrown around as potential buyers are tech giants Google and Amazon.com, both of which are trying to increase their presence in the space.

The big picture
While it’s important to pay close attention to the market, it’s also important to not to get too worked up about what happens in the short term. The most successful stock picks are usually great business that can grow and continue to succeed over many years. Our analysts have uncovered one such company in our new report, “The Motley Fool’s Top Stock for 2012.” It highlights a company that is revolutionizing commerce in Latin America. You can get instant access to the name of this company – it’s absolutely free.

The Dow Jones Industrial Average (INDEX: ^DJI  ) broke its five-day losing streak and finished up as Alcoa (NYSE: AA  ) reported better-than-expected earnings.

The market has been falling on growing concerns over Europe, specifically Spain and Italy, as well as last Friday’s dismal jobs report. These factors combined to send the market down 4% over the past five trading days.

Sentiment shifted last night after hours, when Alcoa reported earnings of $0.09 per share and $6 billion in revenue, blowing away the Street’s expectations of $0.04 per share and $5.8 billion in revenue. Alcoa is largely regarded as a bellwether for the economy, so a good performance from the company bodes well.

Alcoa previously reported that it will cut its production capacity by 390,000 tonnes to 18 million tonnes per year, a positive move but one that investors punished the stock price for all the same. The stock price has plummeted 45% over the past year, as an oversupply in the alumina market led to falling prices. Fool analyst David Lee Smith had written that Alcoa’s future was even brighter than investors gave the company credit for, and he was pleasantly surprised with its earnings reportt.