Official start of the third-quarter earnings cycle was kicked off with Alcoa’s (AA) earnings yesterday after market hours. Alcoa, the world’s largest aluminum producer, was the first component of the Dow to report. They announced a surprise third-quarter profit, helped by higher aluminum prices and demand. Profit came in at $77 million or 8 cents a share, beating forecasts. Although well down from the year-ago period, it ended three straight quarters of losses due to slender demand for aluminum used in cars, homes and airplanes. The company said there finally seems to be stabilizing due to distributors’ low inventories. Spot aluminum prices have risen nicely since June; at the end of September, Alcoa’s average price per metric ton rose 18% to $1,972. Demand for the metal is up, mostly led by China replenishing its stockpiles.

Alcoa’s surprise earnings report is a good signal for the entire market. Before the bell today, shares of Alcoa shot up 5.2 percent to $14.94. PepsiCo (PEP) also reported a stronger-than-expected quarterly profit on higher volume in snacks and beverages, sending its shares up 1.2 percent to $61.90 before the bell. It’s really a robust start to the earnings season. This is going to give the market an upward bias for at least few more weeks or until some major company screws up with its earnings.

Initial claims for jobless benefits fell by 33,000 to 521,000 in the week ended Oct. 3, the Labor Department said, the lowest level since Jan. 3. Economists surveyed by Dow Jones Newswires had expected a decrease of only 11,000. The number of continuing claims drawn by workers for more than one week in the week ended Sept. 26 fell by 72,000 to 6,040,000 from the preceding week’s revised level of 6,112,000. That represents the lowest figure since March 28.

Retailers are posting higher-than-expected September same-store sales, even as analysts raised their estimates as the month came to a close, with the outperformance potentially enough to end a year-long streak of falling sales. Costco reported a 3% gain excluding gasoline sales, doubling analysts’ expectations. Walgreen reported higher non-pharmacy sales last week. Not all retailers are doing well, but most of them reporting better sales.

Alcoa’s surprise earnings, deeper-than-expected fall in jobless benefit claims and better-than-expected retail sales are going to cause fireworks in Wall Street today. About 25 minutes before the start of trading in New York, Dow Jones industrial average futures gained 86 points and Nasdaq 100 futures added 16 points.

Go and make lot of Moola now!

Last week Goldman Sachs, JP Morgan and Citigroup announced earnings that beat the street’s expectations. All of them except JP Morgan traded down even after delivering better news. Bank of America and Wells Fargo are going to report this week.

Bank America reports today before market. Every investor out there is going to watch what they say about TARP, the stress test and their failed acquisitions. Wells Fargo will announce their earnings on Wednesday before market. Wells Fargo has already guided higher so every one is going to focus on Bank of America. Wall Street is expecting a profit of 4 to 5 cents a share from Bank of America compared to 23 cents a year ago.

Capital One is going to report on Tuesday. Capital One serves the high credit risk customers. We have to see whether their consumer credit quality is still declining. If Capital One gives us some positive surprise, the market will rally.

Apart from the banks, we have other major companies that report earnings this week. Apple Inc is going to report Wednesday after market. Investors have questions about whether iPhone sales are doing ok, effect of competition from Blackberry, Mac Sales, etc., Apple’s stock rallied in the past two weeks. We will know whether this rally is sustainable on Wednesday.

UPS is going to report on Thursday before market. It will give us the state of the shipping business. It will also give us the clue about e-commerce trends.

Once upon a time, everyone was eagerly waiting for earnings results from Yahoo. I don’t think anyone cares about them now. Yahoo reports tomorrow. EBay reports on Wednesday. Microsoft reports on Thursday. These results will give us clues about technology sector.

We have to watch for reports from Ford, which reports on Friday before market, to see the signs of recovery in Detroit. In the oil and energy sectors, Schlumberger reports on Friday before market, Conoco Phillips and Occidental report on Thursday before market. Halliburton reports today before market. These results will give us indications about the health of overall economy.

Keep your fingers crossed before you hit the buy button in your online brokerage account!

Related Link: Earnings Season

No more speculation about what Goldman Sachs would earn. No more arguments about whether Citibank is going to really turnaround. We will get the Q1 results of major companies this week. The results will tell us whether the banks are really profitable and the real status of U.S. economy.

• Goldman Sachs (GS) will report the earnings tomorrow, April 14th, before market
• JP Morgan Chase (JPM) will report on April 16th, before market
• Citigroup (C) will report on April 17th, before market
• General Electric (GE) will report on April 17th, before market
• Intel Corp (INTC) will report tomorrow, April 14th, after market
• Johnson & Johnson (JNJ) will report tomorrow, April 14th, before market

The earnings will tell us the true story. If all the above companies report good earnings for Q1, the market is going to rally. Be ready for the wild ride,  it can go in either direction!