Stock indexes were lower in early trading Tuesday after Alcoa (AA) kicked off earnings season in disappointing fashion, reporting a decline in third-quarter revenue, and oil prices dropped after a surprise report that showed supply was higher than expected.
Alcoa, the world’s third largest producer of aluminum, said while profit increased from a year ago, revenue was down and missed Wall Street estimates. Shares were down almost 11% recently.
Wall Street was also under pressure from a correction in oil. West Texas Intermediate crude, the US standard, fell 0.6% and Brent futures, the international benchmark, lost 0.4%. The International Energy Agency said this morning crude oil output from the Organization of Petroleum Exporting Countries hit a record high of 33.64 million barrels a day. This means OPEC will have to make much more aggressive production cuts than those discussed in Algiers to have a significant impact on the current price of oil.
In corporate news, Samsung said it will no longer manufacture the Galaxy Note 7, driving up shares of its competitor Apple (AAPL) in pre-market trading. Analysts estimate that Apple could sell another 15 million iPhones as consumers replace the Galaxy Note 7 with a comparable phone.
The Dow Jones Industrial Average and Standard & Poor’s 500 both declined 0.7% in early trading on Tuesday. The Nasdaq Composite dropped 0.9%.
Globally, the FTSE declined 0.1%, the Nikkei lost 0.7% and the Shanghai Composite added 0.6%.