IG Markets Morning Prices

Good morning,

On Wall St, US markets rose for a fifth straight session as analysts upgrades of technology stocks bolstered optimism ahead of the Q2 earnings season. After the closing bell, Alcoa beat market expectations, reporting EPS of 13c vs forecasts for 11c on the back of lower costs and stronger aluminium demand across the board. Impressively, the company also raised its 2010 forecast for global aluminium consumption.

The Dow Jones Industrial Average was the best of the major gauges, adding 0.2% while the S&P 500 and NASDAQ both rose 0.1%.

This is a good start to the earnings season. Alcoa is typically seen as a barometer for the overall economy as it sells its products to construction, airline, auto and home appliance industries. The fact that growth was driven by stronger demand and higher volumes is very important, indicating the economy's still ticking along. If it had just been cost cutting then the market would have been disappointed.

Domestically, the ASX 200 is called to open 0.6% firmer at 4434. However, given the leads it's difficult to see where the gains are going to come from. Perhaps the positive Alcoa result will boost optimism across the region.

The materials sector is likely to detract points after it was the worst performer in US trade, down 1.3%. Base metals were all lower on the London Metals Exchange while Rio and BHP were down 2.2% and 1.5% in normal LSX trade. BHP's ADR is calling the locally listed stock to open 2% weaker.

The industrial sector also weighed, falling 0.5%. On the upside, it was the technology and consumer staples sectors that added points, rising 0.5% and 0.3%.

In summary, futures are pointing towards a positive open. However, as mentioned above, it hard to see where the gains will come from given our biggest sectors were all lower. The only way we may see gains is if everyone looks past the leads and runs with the positive result from Alcoa.