Stocks were up on Tuesday after Goldman Sachs and Coco Cola joined the roster of S&P 500 companies that have beaten the forecasts on profit and with the Fed Chairman Ben Bernake leaving the door open for more stimulus. The fear of collapse in earnings hasn’t borne out so far . Even though the earnings season has been under way for a short span of time, around 72 per cent of the companies have beaten the estimates, albeit from a bar that had been significantly lowered.
Shares of Goldman Sachs were up by 0.3 per cent at $97.98 even though the quarterly profit was down by 12 per cent. The shares of Coco Cola , which topped the consensus forecast, also rose by 1.6 per cent to $77.69. Equities were driven lower in the early morning session over the frustration building over the lack of specification on the stimulative quantitative easing measures , or the QE3, in his address before a Senate Committee.
But he said that the policymakers will be considering a range of tools for further stimulating growth if it becomes clear that unemployment is not falling and the risks of deflation are mounted. Analysts are expecting eth fed to launch a QE3 , possibly as early as August ; with the Fed being seen as the only hope to raise or revive the GDP growth.
Market experts have cautioned to not look too much into earnings which have been beaten forecast. The analysts had been cutting their estimates in the last year and the 2nd quarter earnings for S&P 500 are expected to rise by 6 per cent as compared to the year earlier, down from the estimated 9.2 per cent on 1st of April.