Over the last few weeks the bulls on the stock market have been looking for a catalyst to drive the stock market higher. The hope was that earnings reports might be able to do just that, but in recent days the hopes had pretty much turned to fear that the news might be bad. As it turns out, Intel absolutely knocked the cover off the ball when it reported its second quarter earnings after the bell earlier today.

How good was this Intel quarter? The consensus estimate was for 43 cents per share, and the company raked in a hefty 51 cents per share. Maybe the most impressive number of all was Intel’s gross margin, which sat at 67% in the second quarter. In their conference call Intel said that demand was higher than expected in all areas of the world, including Europe. The company raised expectations for the current quarter and the year. Intel is now expecting its sales to set a new record this quarter of somewhere between $11.2 billion dollars and $12 billion dollars. The quarter was so good that the company CEO actually called it “the best quarter in the company’s 42 year history.”

Is Intel hitting a home run on the earnings front going to be a catalyst for the stock market going forward? In the short-term it is likely to give investors reason for optimism about the rest of the earnings season. The big question now will be whether other major technology companies like Microsoft, Dell, and Cisco are seeing the same types of good times. The fact that demand is so strong for Intel, especially on the business side, makes me wonder if the corporate world is starting to feel a little more comfortable about the economy. At the same time, it is completely plausible that technology could be in a period of outperformance and the rest of the market is still in the doldrums.

For now, Intel’s earnings report is only a start, but it sure is a great way to start the earnings season! Keep a close eye on earnings reports in the next couple weeks, because they will certainly move the markets in a big way!

Heading into this quarter’s earnings season investors were extremely nervous, as well they should have been, because of the terrible economic backdrop for corporate earnings. So far only a handful of the largest companies have reported, but to say that they have been a big surprise to the upside is an understatement.

Alcoa started earnings season with a pretty nice beat, which is much different than its consistent misses over the last few years. Yesterday was when things kicked into high gear, with several major companies reporting earnings. Yesterday morning Goldman Sachs blew away profit expectations, earning more than any analyst had estimated, even topping last year’s profit. Clearly Goldman Sachs has gone right back to the position it was in before the financial crisis, as the clear leader in the industry. The company that many like to call gold mine will indeed be able to be called that again now, at least for the time being. Also yesterday morning Johnson and Johnson beat earnings estimates by earning $1.15 per share. The company also reaffirmed expectations for the entire year.

The biggest surprise of them all came yesterday evening when Intel delivered an absolutely brilliant earnings report that stunned Wall Street. Revenue was expected to come in at 7.28 billion dollars and the company brought in 8 billion. Earnings per share were 18 cents versus analysts estimates of 8 cents per share. Strategists are calling this beat phenomenal and saying that the company hit one way out of the park on this report.

What does all of this mean anyways? It could mean that corporations are doing a solid job of adapting to the new economic environment. It could also be that we have just seen a small amount of companies that have reported, and the companies that will report later on will not issue such positive forecasts. It is fair to say that if earnings continue to come in this strong over the next few weeks the stock market will likely respond well and the overall economic picture will improve quite a lot.