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Companies Set to Beat Lowered Bar for Earnings Season

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Alcoa started off what's expected to be a lackluster earnings season with its own so-so report, beating sharply pared back analysts' forecasts.

The company said it earned an adjusted 7 cents a share, and revenues of $5.85 billion were off from $5.96 billion a year ago. Analysts were expecting earnings of 6 cents per shares, on revenues of $5.83 billion. The stock initially jumped but fell back and registered a slight after-hours loss.

(Read More: Bring It On: Investors Bullish During June Pullback)

"Earnings season now will take on focus since we're now in the midst of a period of no real economic data," said Mark Luschini, Janney Montgomery chief investment strategist. The next big earnings reports are Friday, when J.P. Morgan and Wells Fargo report.

Alcoa CEO Klaus Kleinfeld, appearing on "Closing Bell," said he expects physical demand for aluminum to grow by 7 percent this year, and he described the fundamentals as strong. He also said that low aluminum prices may finally be seeing a bottom, thanks to the strength of the U.S. auto market.

"Car sales are going to continue to grow on a global basis. That's a good signal for global activity," said Luschini.

As of Friday, 122 companies in the S&P 500 had made pre-announcements, and the ratio of negative to positive was 6.5-to-one, according to Thomson Reuters. That is the biggest percent of negative readings since 2001.

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Stocks rose for a third session Monday, and bond yields pulled back from recent highs. The Dow was up 88 at 15,224, and the S&P was up 8 at 1640. The Nasdaq, weighed down by losses in Intel, was up just 5 at 3484, while the small cap Russell 2000 rose 3 to 1009, an all-time high. The 10-year Treasury was yielding 2.64 percent late in the day, well off the 2.7 plus level it reached Friday after the stronger-than-expected June jobs report.

"As long as (yields) are not going straight up every day, and…we continue to get good economic news, that bodes well for the prospects of corporate earnings," Luschini said. Rising yields would be negative if there's no economic justification. "The magic number would be a 3 handle on the 10-year. That's where it challenges some of the dividend money that's been chasing equities."

What to Watch

Blackberry holds its annual meeting at 10 a.m. Wolverine Worldwide reports earnings before the bell, and Helen of Troy reports after the close.

The NFIB small business survey is released at 7:30 a.m. ET, and the JOLTs survey on job openings and layoffs is released at 10 a.m.

(Read More: Dow Will Hit 60,000 in 20 Years, Ron Baron Says)

The Treasury holds its $32 billion 3-year note auction at 1 p.m.

Allen and Co holds its annual media conference in Sun Valley.

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • CNBC Senior Commodities Correspondent and Personal Finance Correspondent

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.