Market Recap: Stocks Move Higher as Alcoa Kicks Off Earnings Season

Markets closed up on Wall Street today:

• Dow +0.27 percent
• S&P +0.23 percent
• Nasdaq +0.09 percent
• Oil -0.14 percent
• Gold -0.40 percent

On the commodities front:

• Oil (NYSE:USO) fell slightly to $101.42 a barrel
• Gold (NYSE:GLD) falling to $1,610.30 an ounce
• Silver (NYSE:SLV) climbed 0.76 percent to settle at $28.90

(Related: Basel Committee: Banks Will Be Allowed to Draw Down Liquidity Levels During Crises)

Today’s markets were up because:

1) Earnings: Though the three major indexes finished positive, markets were relatively flat today as investors awaited the next big driver: earnings season. Alcoa kicks off the quarterly reports season after the closing bell, with analysts expecting the company to report big drop in profits. Overall, earnings for S&P 500 companies are expected to be up 7.5 percent in the final three months of 2011.

2) Europe: Though earnings are expected to have increased last quarter because U.S. unemployment declined slightly, investors remain nervous about the debt crisis in Europe. After meeting on Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy said that progress has been made on a so-called “fiscal compact” that would enforce stricter budget discipline in the eurozone.

3) Economy: Though the euro remained near a two-month low today, the correlation between U.S. stocks and the euro seems to be breaking down as investors focus more on economic fundamentals. Consumer credit increased at an annual rate of $9.9 billion in November to $20.4 billion, the Federal Reserve reported today.

[Editor’s note: the above is a cross post that originally appeared on Wall St. Cheat Sheet.]