U.S. stocks may drop in the next month after Alcoa Inc. (AA)'s lower-than-estimated sales drove down its shares and the Standard & Poor's 500 Index, Bespoke Investment Group LLC said.
Alcoa tumbled 6 percent and the benchmark measure of U.S. shares lost 0.8 percent yesterday. Four times since 2001, the biggest U.S. aluminum producer slumped 5 percent or more after posting quarterly results, with the S&P 500 declining at least 0.5 percent on the same day. The equity index fell during the rest of earnings season every time, losing an average of 5.1 percent, according to data compiled by Bespoke.
"Ouch," said a report yesterday from Bespoke, a Harrison, New York-based research firm. This "wasn't quite the start to earnings season that investors were hoping for."
S&P 500 earnings have topped the average analyst estimate for eight straight quarters, helping fuel the index's 94 percent surge since dropping to a 12-year low in March 2009, according to data compiled by Bloomberg.