Why? Because they are multi-industry companies: they operate across dozens of countries (40 percent of revenues outside the U.S.) and provide products that sell to many different customers.
In Ingersoll-Rand's case, they make a lot of products that are behind the walls in homes and buildings around the world. We are talking about heating, ventilation and air conditioning systems (HVAC), as well as security systems.
The company's sales growth was up 4.3 percent on an improvement in residential HVAC. Thermo King, the unit that makes temperature control systems for trucks, trailers, and ships, had high single-digit revenue growth.
What about new business? Core bookings for Climate Solutions (HVAC for residential and commercial) were up a respectable 6 percent; meanwhile, Industrial Technologies (power tools, pumps, golf and rough terrain vehicles) was up a less impressive 2 percent.
Most importantly, they upped guidance for the full year to a range of $3.18 to $3.26 (from $3.05 to $3.20, excluding a restructuring charge). Revenue guidance is for a modest increase of 4 percent, slightly above prior guidance of 3 to 4 percent.
There was a similar story with Dow component United Technologies, where earnings and revenues topped estimates. The company also hiked the lower-end of its full-year view. UTX is a rival to Ingersoll Rand in climate and security systems, but they also have Otis elevators, Sikorsky helicopters, and a strong aerospace component with Pratt & Whitney.
Sales were up 7 percent year over year. The company increased the low end of its guidance by 10 cents to $6.75 to $6.85, which is growth of 9 to 11 percent.
The bottom line: the results were good, but not quite great. Modest growth continues, based largely on strength in HVAC.
One major point: both of these companies have strong buyback programs Ingersoll is aiming for $1.4 billion—a considerable amount for a company with a $17 billion market capitalization. Simultaneously, United Tech is now doing $1.25 billion (up from $1 billion), not as much comparatively since it has a $103 billion market cap. Regardless: this is clearly providing a backstop to the shares.
Since the most visible, highly-traded part of the Russell consists of high-beta momentum stocks, underperformance by the Russell 2000 is usually associated with a more defensive move in shares.
Still, that hasn't happened to any great extent, at least in bigger cap stocks. The Morgan Stanley Cyclical Index, a basket of stocks that do better when the economy is up 9.7 percent this year, far outperforming The Consumer Staples Select ETF, which tracks the S&P Consumer Staples sector, a classic defensive play, has risen 4.7 percent.
Even this month, the Cyclical Index is outperforming, up 1.6 percent when compared to the 0.8 percent gain for the Consumer Staples ETF.
2) Hope you saw Elliot Spitzer on Squawk Box with the CEO of a new firm, Tipranks.com, which purports to rank analysts. About time, and a great idea.
It made me chuckle, because this morning a Wedbush analyst raised the 12-month target price for Netflix which hadjust reported earnings, to $245 from $215, while keeping an Underperform rating on the stock.
This disparity may not be that surprising, except the current price of Netflix is $450! They have a new price target that's half the price of the stock. The analyst explains: "We believe Netflix's high valuation is unwarranted given the potential for slowing domestic growth as competition ramps up, coupled with increasing content costs."I guess so!
--By CNBC's Bob Pisani