Despite Rebound Rally, Market May Continue to Drift Lower (AA, MFRM, NOK, TZOO, AMZN, GOOG, STP, BTX)

Stocks rebounded following a five-day losing streak, helped by a better-than-expected earnings report and outlook from aluminum producer Alcoa (AA). Nonetheless, in general, we’re still looking for the market to drift lower during the spring/summer period. However, if this occurs, we would view it as a good potential buying opportunity.

The Chinese Solar Stocks Index was the top performing tickerspy Index on the day, led by Suntech Power Holdings Co (STP) with a 8% gain. The Stem Cell Stocks Index was the day’s worst performing tickerspy Index, with BioTime (BTX) down -5%.

Stocks rose on the day, with the Dow up 89 points to 12,805. The S&P climbed 10 points to 1,369, while the Nasdaq jumped 25 points to 3,016. Oil rose $1.68 to $102.70 a barrel, while gold slipped -40 cents to $1,660.30 an ounce.

In economic news, the Federal Reserve’s Beige Book survey indicated the economy continues to expand in all 12 Fed regions. “Hiring was steady or showed a modest increase across many districts,” according to the Beige Book survey.

In earnings news, shares of Dow component Alcoa surged 6.4% after the aluminum company posted a first-quarter profit of $94 million, or 9 cents a share, on revenue of $6 billion. Analysts expected a loss of -4 cents a share on revenue of $5.77 billion. Five pros counted Alcoa among their top holdings at the end of Q4 and nearly 1,900 tickerspy members own the stock in their portfolios.

Shares of Mattress Firm Holding (MFRM) soared 17.6% after the Texas-based company posted a fiscal fourth-quarter profit of $17.4 million, or 56 cents per share, compared with a net loss of -$1.6 million, or -7 cents per share, a year earlier. Revenue rose to $188.6 million from $127.5 million., while same-store sales surged 25%. Analysts expected a profit of 24 cents per share on sales of $197.8 million. The company forecast a full-year profit of $1.40-$1.48 on revenue of $1.03-$1.06 billion. Analysts were expecting EPS of $1.36 on sales of $880 million.

Shares of Finnish mobile phone giant Nokia (NOK) plunged -15.7% after the company said competition from rivals, particularly in emerging markets, will hinder its first-quarter results. Nokia said it sold 71 million units in the quarter, well below the 108 million it sold a year earlier. Six pros counted Nokia among their top holdings at the end of Q4 and nearly 940 tickerspy members own the stock in their portfolios.

Shares of Travelzoo (TZOO) climbed 28.5% after the provider of online travel and entertainment deals said it’s hiring a financial adviser to explore a sale of the company. Amazon (AMZN) and Google (GOOG) are said to be possible suitors for Travelzoo.

Tags: AA, AMZN, BTX, GOOG, MFRM, NOK, STP, TZOO