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!

Alcoa is announcing earnings today which means today marks the unofficial beginning of the earnings season on Wall Street. Earnings season is always very important to the stock market and the economy, but because of the uncertainty surrounding the economic recovery this season will be under the microscope even more.

What do these earnings reports need to show to prove that a recovery is starting and the recession has finally ended? The single biggest thing that we need to see is top line revenue growth from businesses. In the last quarter many companies reported earnings that beat expectations, but the majority of the time that was because of cost cutting measures. Eventually a company reaches a point where they can no longer cut costs and they must just grow their revenues, and Wall Street wants to see this occurring.

These earnings reports are likely to show how confident the business sector is as well as how the consumer is doing. Look at retailers earnings and consumer service related earnings to see the strength of the consumer. Some high profile companies are much more closely tied to business or government spending, such as infrastructure and some technology companies such as Cisco.

Alcoa isn’t the most important of companies that announces earnings, but it may be important to how the market views the season overall. If the company is able to get things started on a positive note the market is liable to benefit quite quickly. PepsiCo is also set to announce to earnings this week, so we will see results from a huge international powerhouse in food and beverages sector.

Expect the market to react in a big way to earnings reports this season. If high profile misses start becoming commonplace this market will find its way quite a bit lower, but if top line revenue growth starts showing up this nice move upward may well continue.