Third-quarter earnings season officially starts on Wednesday afternoon with Alcoa's (AA) report. The aluminum maker is expected to announce revenues of $4.5 billion and a loss of 11 cents per share. The results will look awful compared to last year because the commodity bubble peaked in Q308.

Joining AA will be 6 other S&P 500 members: Costco (COST), Family Dollar (FDO), Marriott (MAR), Monsanto (MON), Pepsi Bottling (PBG), PepsiCo (PEP) and Yum! Brands (YUM). We have confirmed scheduled reports from a total of 24 companies.

Economic data will largely take a backseat to the earnings news. There is comparatively little on the calendar, with the most newsworthy release being the September ISM services index. The weekly energy and mortgage applications reports could still influence trading, however.

Monday: September ISM services survey Wednesday: August consumer credit, September treasury budget, weekly crude inventories, weekly mortgage

...

On Wednesday, Marriott International Inc. (MAR) said it would incur $760 million in impairment charges during the third quarter for its timeshare segment. The division saw soft demand for its luxury residential products in 2008 that weakened further in the current year. The company now plans to increase cash flow by lowering prices and development at luxury fractional and residential resorts.

Besides reducing housing prices, Marriott intends to convert certain proposed projects for other uses and sell some undeveloped land. While the company will maintain promotional pricing and marketing incentives in Europe due to weak demand, it has stopped pursuing additional development in the continent.

Marriott will record impairment charges of $295 million associated with five luxury residential projects, $300 million for nine North American luxury fractional projects and $95 million for one North American timeshare project. The company will also incur charges of $55 million for four

...

Marriott International Inc. (MAR) recently said it signed 21 management contracts for hotels and resorts in the Asia-Pacific region. These hotels, scheduled to open through the end of 2013, will add approximately 7,000 rooms to the company’s portfolio. The projects are lined up in China, India, Thailand, Vietnam, Philippines and Cambodia.

As a result of the expansion, Marriott’s Asia-Pacific portfolio will have 154 hotels offering 51,500 rooms in 18 countries by the end of 2013.

Both business and leisure travel have decreased significantly in the past two quarters due to the economic turmoil. Corporations across the globe have adopted stringent methods to curtail expenses and restricted business trips and retreats. As a result, hotel operators like Marriott and Starwood Hotels & Resorts Worldwide Inc. (HOT) were forced to depend on leisure travelers who are more vulnerable to price shifts. Thus, their balance sheets have been severely impacted.

...

For Immediate Release

Chicago, IL – August 4, 2009 – Zacks.com announces the latest Industry Outlook. Today’s outlook from Zacks Equity Research analyst Sean P. Smith discusses the Hotels & Lodging sector. Highlighted stocks include: Starwood (HOT) and Marriott (MAR).

Here is the latest on the Hotels & Lodging sector:

Through the first half of 2009, weekly RevPAR in the U.S. fell by an average of approximately 20% year-over-year. The majority of this decline was attributable to declines in occupancy, but ADR also fell meaningfully as well. As the year has progressed, the pace of ADR deterioration has accelerated, from down 7.4% in the first quarter, to down approximately 10% in the second quarter.

Given the lower levels of room revenue, we expect margins to tighten materially during 2009, resulting in substantial year-over-year earnings declines.

We would continue to avoid lodging companies such as Starwood

...

As the recession continues, hotel industry operating metrics are showing no signs of improvement as both business and leisure travelers are cutting back.

OUTLOOK

The lodging industry is facing significant challenges stemming from the economic recession, as both business and consumers are cutting back on travel expenditures. When evaluating hotel companies like Starwood (HOT) and Marriott (MAR) during this down cycle, we will be paying especially close attention to changes in average daily room rates as an indication of how quickly the sector may recover once the economy improves.

A key operating metric in the lodging industry is RevPAR (revenue per available room). This metric is derived by multiplying the occupancy percentage of a hotel over a given period by the average daily room rate (ADR) over that same period. Changes in either occupancy or ADR will impact RevPAR, but with different implications for bottom-line profitability.

Given the current

...

Before you build a big commercial building, you generally have to hire an architect. Big office buildings are generally not built from off-the-shelf plans. Thus the amount of new work that architects are getting is a very good indicator of how commercial construction will be doing 9 to 12 months from now.

The graph below (from http://www.calculatedriskblog.com/) shows that the American Institute of Architects (AIA) billing index has been below 50 (indicating contraction) every month since January 2008. This month it fell again by five points to 37.7. This is still a bit better than the record low set back in January, but it is not a good sign.

If one has a very long-term perspective, it is a good thing. With vacancies rising in just about every type of commercial real estate, the last thing the market needs is new supply. Defaults on commercial mortgages are shaping up as

...

For Immediate Release

Chicago, IL - June 17, 2009 - Zacks.com announces the latest Industry Outlook. Today's outlook from Zacks Equity Research analyst Sean P. Smith discusses the Hotels & Lodging sector. Highlighted stocks include: Starwood (HOT) and Marriott (MAR).

Here is the latest on the Hotels & Lodging sector:

The lodging industry is facing significant challenges stemming from the economic recession, as both business and consumers are cutting back on travel expenditures. When evaluating hotel companies like Starwood (HOT) and Marriott (MAR) during this down cycle, we will be paying especially close attention to changes in average daily room rates as an indication of how quickly the sector may recover once the economy improves.

A key operating metric in the lodging industry is RevPAR (revenue per available room). This metric is derived by multiplying the occupancy percentage of

...

For Immediate Release

Chicago, IL - June 16, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Marriott (MAR), Starwood (HOT), National Semiconductor (NSM), Kyocera (KYO) and SunPower (STP).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday's Analyst Blog:

Extended Stay Hotels Bankrupt

The current owners of Extended Stay Hotels (private) acquired the chain in June of 2007, near the peak of the market for hotel assets, for $8 billion. The deal was highly leveraged, reportedly consisting of $7 billion in debt and only $1 billion in cash. With

...

Extended Stay Hotels, which owns a chain of 680 hotel properties throughout the United States and Canada, filed for Chapter 11 bankruptcy protection this morning. The move is yet another sign of the ongoing deterioration in the lodging industry. The privately-held chain reported assets of $7.1 billion and debts of $7.6 billion at the end of 2008. Given that operating fundamentals in the hotel sector have weakened substantially in 2009, we would expect that the company’s financial position has deteriorated further since year-end. The current owners of Extended Stay Hotels acquired the chain in June of 2007, near the peak of the market for hotel assets, for $8 billion. The deal was highly leveraged, reportedly consisting of $7 billion in debt and only $1 billion in cash. With this amount of leverage, a firm can quickly experience a crisis if operating results turn lower. While ...

For Immediate Release

Chicago, IL - June 1, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Marriott (MAR), Starwood (HOT), Intercontinental Hotels Group (IHG), Wyndham Worldwide (WYN) and Gafisa S.A. (GFA).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Friday's Analyst Blog:

Hotel Stocks Due for Correction

Shares of Marriott (MAR) have rallied approximately 85% from the lows reached in early March. Shares of Starwood (HOT) have climbed even higher, rallying roughly 150% since early March. Shares of other companies in the industry, including Intercontinental

...