Sector Snap: Aluminum Stocks

Two rivals in the aluminum sector got an early boost Monday as investors weighed news that Alcoa Inc. may sell a key consumer products unit, and Alcan Inc. announced a joint venture agreement with Saudi Arabia. Shares of Canada's Alcan touched a 52-week high of $60.17 after disclosing a $7 billion plan to develop a bauxite mine, alumina refinery, aluminum smelter and power plant with Saudi Arabia's Ma'aden mining company.

Alcan shares picked up 41 cents to $59.92 in afternoon trading on the New York Stock Exchange. The stock reached its previous peak for the year on Friday at $59.80. Shares traded at a low of $37.42 in September.  On Sunday, Alcoa said it would consider strategic options for its packaging and consumer businesses, which include the Reynolds brand, and its electrical and electronics services unit. The consumer and packaging segment brought in about $3.2 billion in revenue last year.

Prudential analyst John C. Tumazos estimates a sale of the group could generate proceeds of $3 billion, while a sale of the auto wire harness business could be worth $450 million in proceeds. Alcoa shares flirted with a 52-week high earlier in the session, then reversed course to dip 5 cents to $35.94 in afternoon trading on the New York Stock Exchange. The stock, which has traded between $26.39 and $36.96 over the past year, reached $36.10 in earlier trading.

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