Dow slide continues in 5th straight session of losses

For a fifth consecutive day the Dow Jones Industrials posted negative returns leading their slide from the 9000 point mark early last week. The 600 point slide during the sell-off was caused by continued US economic concern, the weakening of the domestic job picture and the sustained struggles of banks and automakers.

News makers and headliners over the past week have been significantly negative as company quarterly losses and job cuts continue to rule the front pages. Alcoa (AA), one of the main culprits of the bearish trading tone, reporting a loss far wider than analysts expected along with a 35% decline in revenues. Whether in North America or across the world the story seems the same as Sony (SNE), the electronics giant is rumored to be looking at steep job cuts amidst a rumored loss of $1.1Billion for the year, a first in the history of the company.

Citigroup (C), a bank with its well-known fair share of troubles, has confirmed talks with Morgan Stanley (MS) to combine investment banking units. The troublesome news here for Citi is that just months ago the executive branch was adamant about not wanting to sell its brokerage unit Smith Barney. The supposed deal would net Citi group anywhere from $2.5Billion to $3Billion in gains and give Morgan Stanley 51% control over the combined brokerage partnership. It doesn't help either that estimates for the bank's quarterly loss have risen to as high as $10Billion and renewed talks of another capital infusion from the Federal Government will likely be needed.

On a counter-note, left for dead and unprofitable smart phone maker Palm (PALM) was the star of the show at the Consumer Electronics Show in Las Vegas, reviving hopes that the company can turn the corner as it announced a new platform and phone to Apple-like fanfare. The Palm Pre will be available later this year, sports an intuitive interface and sleek design, and has set web bloggers ablaze with its style and functionality. Traders have taken note as well, sending Palm shares almost 100% higher since the device was first revealed.

Disclosure: Author owns C

Tuesday brings in Valuation Hunters, Stocks Rise 10%

The headlines were set to spook once again: "Consumer Confidence at all-time low" (CNN). "Home prices see record plunge" (Reuters). But the bargain and valuation hunters were out and about nonetheless. When Stocks get this cheap the big-time and small-time Investors stand up and take notice.

Aluminum maker Alcoa (AA) fell to its lowest P/E ratio ever-recorded and today observed value-investors jump in cautiously in early-morning trade but emphatically as the day moved forward. Alcoa gained almost 18% on the day as both the Dow and S&P gained a full 10 percentage points.

In other good news, Boeing (BA) Investors took a deep sigh of relief as the company struck a tentative deal with its Machinist workers. A strike that, at the worst possible time, plagued the company for weeks on top of economic-driven market sell-offs. Boeing shares recovered 15% on the day.

Wireless Carriers in North America had a particularly positive rebound trading session. Verizon (VZ), up 15%, jumped for the second straight session and AT&T (T), up 13%, followed closely as Investors are taking heed of Wireless growth prospects despite economic woes. Devices like Apple's (AAPL) iPhone and RIM's (RIM) Blackberry Bold and Storm models are creating value-propositions that customers are willing to engage in. As Apple announced their quarterly results last week, headlined by almost 7Million unit sales of iPhone 3G, Carriers around the world are now beginning to see a customer set willing to spend more on combined Voice and Data plans.

In Canada, Rogers Communications (RCI.B) announced its quarterly results, which of course were headlined by iPhone sales of over 250,000 units. The battered Canadian Wireless company stock rebounded 11% on the day.

Investors, analysts and the media in particular, like to beat the doom and gloom drum on bad days and the euphoric relief drum on good days, but for those observing and waiting on the sidelines it is easy to get caught into the hype. Companies still trade on fundamentals and valuations, and while attractive valuations are observed all over the market these days I'd be much more comfortable seeing sustained positive moves over a number of days, rather than a valuation-based up day that now prices in complete expectations of a further half-point Federal Reserve Interest Rate cut.

This market will need some more positive reinforcement, so until then, as great as it feels to be euphoric about stocks again, the euphoria will have to wait for now.

Disclosure: Author owns AAPL, T, RCI.B, BA

Markets flat Monday, Traders waiting for Earnings

As the NCAA Basketball Championship loomed Monday Night for all college sports fans, markets in the US were mixed, but mostly flat as the April earnings season creeps up around the corner.

Markets started the day with a rally as the S&P paced gains of about 1%, but the afternoon led to a minor selling spree pulling the major indices towards the flat line. As the tent pole for the earnings season, aluminum maker Alcoa (AA) reported a 54% drop in profit on a year over year basis. Analysts expected $0.50/share but the company reported $0.37/share ($0.44/share excluding special items). Not a good quarter for the metal maker, but considering the economic stressed, things definitely could have been worse for Alcoa.

The earnings season will definitely pick up as the days fall off the calendar in April. Expect volatility and a slew of analyst upgrades and downgrades throughout the month as the profit picture for US companies becomes clearer.

Disclosure: Author does not own AA