Wall Street surged during trading yesterday. The NASDAQ pushed forward by a surprising 2.68 percent (58.56 points), followed closely by a 2.25 percent (24.08 points) gain by the S&P 500. The Dow Jones Industrial Average followed a bit further behind gaining 1.99 percent (201.77 points).
Most indexes on Wall Street opened higher this morning, but their gains were quickly diminished. The strong push given to investors yesterday by corporate earnings from the likes of Microsoft and Ford seem to have worn off overnight.
The gains of giant industrial corporations may have fallen short of supporting entire stock exchanges this morning, but the outlook for the individual companies is still bright. According to MarketWatch, Ford Motor, which was nearly destroyed by the collapse in 2008, has regained its bearings and is charging forward.
Ford was the only one of the Big Three to not take a government bailout, meaning they got to keep all of their profits after the economy leveled off. The automaker turned in a $2.6 billion profit in the second quarter of 2010. Much of that renewed profitability has been because of Ford’s focus on selling more expensive vehicles. Ford, like most companies, loses money on standard sedans and light cars. At the very least they barely finish in the black. However, trucks and SUVs are major moneymakers for car companies. Ford is still the industry leader in light trucks.
The strong second quarter seems to project into even more strong earnings throughout the year. Many analysts expect 2011 to be even better.
In other news, according to Fortune, European banks have undergone important government stress tests in the last few weeks. Today, those test results will be revealed to the public for 91 separate banks. Many investors are playing the waiting game until the results come out.
The biggest banks are expected to do fine in their tests – unlike in the United States, where only JPMorgan Chase passed its Treasury inquiry. The real problem will be with smaller lenders and debt holders. If they are shown to be failing, it could jeopardize the European recovery and renew anxiety about a looming debt crisis.