Earnings — Good and Bad News

The good news: both Oracle and Accenture (the world's biggest consulting firm) are up on strong earnings — ORCL had strong sales, and raised its dividend (to $0.06 from $0.05) while ACN raised its current year forecast. ACN up 8 percent pre-open.

The bad news: I'm not sure how representative tech and consulting companies are of the earnings commentary we will be seeing for Q1. We are going to get an earful about higher commodity costs from retailers, food and packaging companies, metal companies, industrials, and others.

In a way, Darden Restaurants (DRI) (Olive Garden, Red Lobster and LongHorn Steakhouse), is a better company to watch: Q3 profit was above expectations, though apparently a favorable tax rate made the difference. Same store sales is what mattered: Red Lobster was up 0.1 percent, Olive Garden was flat and maybe a big lighter than expected. Fair, not great.

The other major metric to care about is margins: at the restaurants it was 24.6 percent, higher than most expected, and that is good news, as expenses and labor costs appear to have been a bit lower than expected. Guidance for the rest of the year was raised slightly.

The puzzling news: markets keep rising, even thought the nuclear reaction situation in Japan is not stabilizing, Libya is a muddle, Bahrain can go either way, and the EU still keeps flip-flopping on how much money they are putting into the European Financial Stability Facility (EFSF).

You know the drill. Bulls insist markets are rising for three reasons: 1) the global growth and reconstruction story is the overriding macro story, 2) the end of the quarter and the belief that inflows in the beginning of April will be strong into stocks because of the notable outflows we have been seeing from bonds,and 3) the Fed is continuing to pump money into the system (nearly $7 billion yesterday from Permanent Open Market Operations).

The Dow Industrials as of this writing are a little more than 200 points from the old multiyear high it hit on February 18.

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