Pfizer also reports before the bell, along with United Technologies, CIT, TD Ameritrade, Southwest Airlines and PNC. Google reports after the bell.
There are a few items on the economic agenda, including weekly jobless claims at 8:30 a.m. The Philadelphia Fed survey for April and leading indicators are both reported at 10 a.m.
Fed Vice Chairman Donald Kohn speaks and takes questions at the Richmond Fed's Credit Market Symposium at 9:45 a.m., and Dallas Fed President Richard Fisher speaks to the Chicago Council on Global Affairs luncheon at 2:05 p.m.
President Bush meets with U.K. Prime Minister Gordon Brown at the White House. The two leaders speak to the press at 2:35 p.m. (Brown and Bush are expected to discuss the subprime meltdown and the price of oil among other topics. Brown meets with Fed Chairman Ben Bernanke Friday)
Wednesday's earnings-driven market was the best performing since April 1. The Dow was up 2.1 percent to 12,619 and the Nasdaq was up 2.8 percent to 2350. The S&P 500 rose 2.3 percent to 1364.
IBM after the bell Wednesday said it earned $2.32 billion, or $1.65 per share, on $24.5 billion in revenue. Analysts had expected earnings per share of $1.50 and revenues of $23.8 billion. IBM certainly benefits from its multinational structure, with 65 percent of its revenues coming form overseas. But the company also upgraded its forecast for the year, and there were bullish comments from CEO Sam Palmisano. "We feel good about the year," he said in a press release.
In its conference call, IBM was reported to say its customers are carefully reviewing new contracts as they look for ways to cut costs, but it also reassured that its momentum is more than just currency driven.
Ebay, reporting after the bell, also surprised on the upsidebut its core auction business shows signs of weakness. Ebay had profits of $459.7 on revenues of $2.19 billion, better than expected.
Those two reports were just gravy on a day where some big companies delivered, a major feat in a market filled with distrust. J.P. Morgan and Coca-Cola , two Dow components, both came in ahead of expectations. J.P. Morgan's Jamie Dimon followed other Wall Street executives with comments that the credit crunch is closer to the end than the beginning. Financial stocks took off, and the S&P financial sector gained 3.3 percent. The materials group was the day's best performer, gaining nearly five percent on rising commodities prices.
As of now 12% of the S&P has reported, and earnings are now reported at 21.6 percent below last year's first quarter. 45 companies or 74 percent have surprised on the upside.
I spoke with Brown Brothers Harriman senior portfolio strategist Brian Rauscher, who called in from Europe to discuss the earnings period. Rauscher has been saying all along that he doesn't think first quarter profits are as bad as "the gloom and doomers are saying."
"Maybe we get there later this year, but right now corporate America remains resilient. Some are gaining on the weak dollar and global growth but profits are profits," he said.
"Whoever can't get pricing power is potentially hurt," he said. "These technology companies aren't as affected." He also said multinationals that sell products abroad aren't affected and energy companies themselves aren't affected. "If oil goes to $120 or $125, it again will slow the domestic economy, but if crude is going up because the dollar's going down, there are offsetting factors."
The market also responded Wednesday to inline consumer price data, which showed an uptick, but not the surprise runup seen in PPI Tuesday. I asked Rauscher about the bubbling price of oil, which in no way seems factored into Wall Street's current earnings or economic forecasts.