Materials exchange traded funds (ETFs) fell slightly on the news that Alcoa (AA) reported a 50% profit loss from a year ago. The higher cost of energy and raw materials, coupled with the weak dollar, offset the spike in the price of aluminum.
The company reported earnings of 37 cents per share, but analysts were expecting an average of 49 cents per share, Steve James for Reuters reports. Even though the earnings estimates were lowered by analysts, they still expected the company to benefit from the cost of aluminum later this year.
The price of aluminum on the London Metal Exchange was below $2,500 per metric ton at the start of this year, but is now $2,970.
ETFs that count Alcoa as a major component are iShares Dow Jones US Basic Materials (IYM ; Alcoa is 5.7%) and Materials Select Sector SPDR (XLB ; Alcoa is 6.8%).
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.