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Morning Call: Stocks Climb as Earnings Season Kicks Off

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October 12, 2011: US stock futures point to a sharply higher open on Wall Street, following gain in European markets. S&P futures are up more than 10 handles. We are once again seeing investors shrug off bad news and continue buying, a tell-tale sign of a bull market. Last night Slovakian parliament was unable to pass approval of an EFSF expansion, although it is expected to pass in later votes. Alcoa (AA) also disappointed with its earnings report, and is trading off nearly 4%. European officials continue to strike a firmer tone when discussing measures to lift the region out of its current debt woes. Despite Alcoa's disappointing kick-off, investors continue to be optimistic about earnings season. During the rally off March 2009 lows, earnings season has been a boon for stocks. Watch to see if companies can maintain the upward momentum this quarter, especially with guidance. Investors will also be on the lookout for Fed minutes from the September 20-21 meeting. As a result of that meeting, the Fed announced Operation Twist, a plan to swap shorter-maturity bonds for longer-dated instruments. The plan had three dissenters, and the market reacted very negatively to its introduction, so it will be interesting to see the discussion that went on, reflected in the minutes. With a heavy short interest in the market, stocks are hardly taking the time to pause before breaking multi-month downtrends. Yesterday was a healthy digestion day, and a sign that bulls remain in control <b>...</b>

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