Despite Rebound Rally, Market May Continue to Drift Lower

Stocks rebounded following a five-day losing streak, helped by a better-than-expected earnings report and outlook from aluminum producer Alcoa (NYSE: AA - News). 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 (NYSE: STP - News) with a 8% gain. The Stem Cell Stocks Index was the day's worst performing tickerspy Index, with BioTime (AMEX: BTX - News) 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 (Nasdaq: MFRM - News) 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 (NYSE: NOK - News) 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 (Nasdaq: TZOO - News) 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 (Nasdaq: AMZN - News) and Google (Nasdaq: GOOG - News) are said to be possible suitors for Travelzoo.

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