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Alcoa and CSX: Generally Good News

S&P 500 futures are up almost 1 percent pre-open, Europe up 1 to 2 percent. This would be the sixth straight up day for U.S. markets. Yesterday, the S&P 500 posted its first 5-day win streak since April.

Good news on CSX earnings: fairly upbeat commentary, both volume and pricing is improving, which bodes well for the rest of the transportation sector.

The good news on Alcoa earnings:they raised their demand outlook, and management did not seem overly concerned about the potential for demand to slow in China or Europe.

The bad news on Alcoa : Bank of America/Merrill Lynch and Goldman Sachs lowered their full year earnings estimates. This from Goldman: "our previous assumption of margin improvement appears to be too aggressive ... aluminum fundamentals are the worst among base metals. The industry is weighed down with capacity overhang and significant inventory in the supply chain. We would need to see a significant production rationalization and inventory draw to get more positive on aluminum and Alcoa."

Elsewhere:

1) Propelled by stronger demand from the auto industry, Korean steel giant Posco reported better-than-expected Q2 earnings, its most profitable quarter since Q3 2008.

Despite the strong quarter, it cautioned headwinds may lurk ahead. The steelmaker warned profits in the second half could fall 30 percent from the first six months of the year. The company's CFO Choi Jong-tae notes that "steel prices could even fall" on concerns over "weak demand from China and global economic slowdown."

2) MBIA jumps 11 percent after Bruce Berkowitz's Fairholme Capital Management disclosed an 11 percent stake in the bond insurer. The fund now owns 22 million shares of MBIA.

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