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Pre-Market Primer: Earnings Season Off to a Positive Start; Apple Considers Cheap iPhone

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Sprint and Dish Network are in a bidding war with Clearwire.

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Global equities advanced this morning after Alcoa (NYSE:AA) opened earnings season on a positive note.

Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) rose 0.21% to 13,295 and S&P 500 (INDEXSP:.INX) futures climbed 0.14% to 1,454.40. Nasdaq (INDEXNASDAQ:.IXIC) futures are up 0.09% to 2,716.50.

Shares of aluminum giant Alcoa rose 1.76% in after-hours trading after the company's earnings report met analyst expectations with profits of $242 million, up from a $191 million loss in the year-earlier period. Revenue of $5.9 billion beat forecasts and the company gave a positive outlook for 2013. It expects aluminum demand to rise 7% this year. Though corporate profits are projected to be better in the fourth quarter than the third, many companies have issued downward earnings guidance in the past few months. Investors and analysts are going into earnings season with lower expectations.

Dish Network (NASDAQ:DISH) outbid Sprint (NYSE:S) in an unsolicited offer to acquire Clearwire (NASDAQ:CLWR). Dish offered to buy the home 4G wireless broadband company for $3.30 per share.

The Wall Street Journal reports that Apple (NASDAQ:AAPL) is working on a lower-end iPhone to capture the segment of the market that it has ignored since the smartphone era began. The proposed phone might have a polycarbonate plastic shell rather than more expensive metal. In the third quarter of 2012, Apple held 14.6% of all worldwide smartphone shipments, while rival Samsung (KRX:005390) took 31.3%, taking the lower and middle end of the market. A cheaper Apple phone could help the company grow in markets such as China and India, where handsets are rarely subsidized by carriers and most customers can't afford an expensive iPhone 5.

German industrial output missed forecasts, rising only 0.2% in November after falling 2% in October. From the year-earlier period, the output has slumped 2.9%. Germany saw rising demand for capital goods, but not enough to offset the fall in orders for consumer goods.
The UK trade fell to 9.164 billion pounds in November. Britain's exports rose 2.9% over the period.

The Bank of Japan is mulling over whether to add 101 trillion yen to its asset-buying program to satisfy the new government's demands. It might double its inflation target to 2% at its next policy meeting. Newly elected Prime Minister Shinzo Abe even threatens to take away the central bank's independence if it doesn't do more to stimulate the economy.

Twitter: @vincent_trivett
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No positions in stocks mentioned.
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