Markets pick up as firms enjoy sales boost
A SLEW of the world's biggest companies reported beating forecasts for sales and profits, giving the lie to fears that the global economic recovery is already faltering.
Stock markets leapt higher as investors picked through earnings reports from numerous sectors of the economy, and while executives expressed caution and noted uncertainty over the future, few predicted a double-dip recession.
The fragility of the recovery was again under discussion on Capitol Hill yesterday, where lawmakers were questioning Ben Bernanke, chairman of the Federal Reserve, for a second day of his twice-yearly report to Congress.
On Day One, the central bank boss had warned that the outlook was "unusually uncertain", but he did not depart from his prediction that the US economy would continue to grow modestly.
The Dow Jones Industrial Average had surged by more than 2pc by lunchtime trading in New York, more than erasing the drop that Mr Bernanke's testimony had caused on Wednesday. Traders were heartened by the results emerging from global corporations such as Caterpillar, the heavy equipment maker, and Continental, whose merger with United Airlines will turn it into the largest airline in the world.
Caterpillar's chief executive, Doug Oberhelman, said sales were strong enough to beat Wall Street's forecasts for the rest of the year, too. "While there are significant economic concerns around the world that we are watching closely, orders have continued to outpace our shipments, and we expect to increase production," he said.