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Brace Yourself Earnings are Coming: US Markets Healing Wounds with Double Digit Growth

On Tuesday, US major indices surged to new levels as a spike in oil prices ignited rally in energy sector. The blue chip index, Dow Jones Industrial Average (DJIA) moved higher 124 points, or 0.7% to 17,683.  The S&P 500 (SPX) index soared 12 points, or 0.6%, at 2,054, following shortly sliding below the trend line. Rallies in the wider-market index were caused by a surge of 2.3% in energy sector and a 0.9% increase in health care unit.

Paul Nolte, a portfolio manager at Kingsview Asset Management, described the weakness in tech shares because of Juniper Networks, articulating that its outcomes for the quarter concluded in March would upset. The firm’s shares were lower 9.2% during Tuesday morning session.

All three benchmarks declined on Monday, wiping initial gains in afternoon trade as investors were ready for the beginning of what’s predicted to be a horrible earnings season. The falloffs came prior to the most awaited earnings starter report from Alcoa (AA) which declared a 92% decline in profit and sliced its 2016 guidance for the aerospace market. Its shares were lower 4.6% during Tuesday session.

On Tuesday shares of Juniper Networks Inc. (NYSE:JNPR) plunged almost 8% following the firm posted a profit caution and the stock was lowered at UBS. UBS sliced ratings of Juniper to neutral from buy and lowered its price target to $25 from $31, defining that the cautioning could specify demand issues in the major enterprise segment. That’s a problem as it comes at a time when firms need network upgrades amongst the swing to the cloud.

Juniper’s enterprise segment has shown no improvement in past years in part because of hiked rivalry. Enterprise sales summed up $1.6 billion in 2015, the similar level as 2011. In a note to clients on Tuesday, MKM Partners expert Michael Genovese reported that recent enterprise payments arrived back feeble for F5 Networks Inc. and Juniper, but “astonishingly solid” for Cisco Systems, Inc.(NASDAQ:CSCO)

Alcoa Inc(NYSE:AA)sluggish performance sowed the seeds of concern that more earnings declines could be coming. Several predict financial-sector earnings to be especially sluggish as banks are clutched by the upshot from low oil prices and low interest rates.

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