June Fed minutes due out, Alcoa (AA) on the rise and Citigroup (C) may have to pay $7 billion to resolve probe.

Markets were heading higher on Wednesday morning ahead of the Federal Reserve minutes due out later today. The data will be released at 2:00 p.m. ET and give an insight as to what was discussed during the June 17th and 18th Fed meeting. Some analysts are anticipating insight for a possible start on short-term interest rate hikes. Interest rates have remained relatively low since early 2009 and have been a driving force in stock prices. Federal Chairwoman, Janet Yellen, will hold a news conference directly following. She said that there has not been a unanimous decision as to what to do about interest rates. “We’ve made quite a lot of progress in our discussion, but we’ve not yet reached conclusions about that or other aspects of our package,” she said.

Shares of Alcoa Inc. (AA) were rising over 4% after the company kicked off earnings season on a positive note. The company announced that second-quarter earnings rang in at $216 million, or 18 cents per share.  This was up substantially from the loss of $119 million, or loss of 11 cents per share, a year ago. Sales came in flat at $5.8 billion. This data surpassed analyst’s expectations of $5.66 billion in revenue on earnings of 12.4 cents per share. The company reported that every department reported profitable during the second-quarter. Of all of their divisions, the highest of them all was the Engineered Products and Solutions, with after-tax operating income of $204 million. The company has announced that they have plans to delve deeper into the more profitable finished products industry. Items like truck wheels and aircraft fuselages. Their CEO, Klaus Kleinfeld, said they have been placing focus on cutting cost and bettering their performance in their traditional commodity business. Kleinfeld said on a conference call, “The transformation of Alcoa truly is in high gear and the results show this. Our strategy is working.”

Shares of Citigroup Inc. (C) were trading slightly lower after news was released that the company might have to pay roughly $7 billion to resolve a probe from the United States Government. The probe is to see whether or not the company defrauded investors of billions of dollars in mortgage securities. The settlement will be mostly cash and some of the funds will be used to help borrowers. Analysts had been predicting the settlement to come in around $3 billion. Citigroup is expected to report their second-quarter results on Monday morning.

That’s all for today,

Warren Gates, Normandy Research

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