71% of S&P 500 companies beat on earnings in second quarter
by Sue Chang
This bull market may be long in the tooth, but stocks could still nudge higher next week if earnings continue to surprise on the upside and data reinforce the perception that the U.S. economic recovery remains intact.
The S&P 500 rallied 3.6% in July for a five-month winning streak that brought its year-to-date gains to 6.3%. The Dow Jones Industrial Average added 2.8% in July — its sixth consecutive monthly advance — to climb 5.8% this year, while the Nasdaq Composite jumped 6.6% in July to bring its 2016 advance to 3.1%.
“The market has been expecting earnings to be C or C+, but so far this quarter earnings have been a B-,” said Jack Ablin, chief investment officer at BMO Private Bank.
With 63% of S&P 500 companies having announced quarterly results, 71% have beat on earnings and 57% have reported revenue above estimates, FactSet data show.