Many people have been amazed at the resilience of US equities markets over the last several months, especially considering the ongoing bad news in credit and real estate. Even with recession talks and consistently bad earnings for the fourth quarter and early into 2008, the Dow remains about 1,000 points above its low late last year. The blue chip index, comprised of 30 of the largest cap stocks currently sits just below 12,700 in late afternoon (April 22) trade.

Oil continues to rise, currently closing in on $120 per barrel. Retail gas prices have cleared $3.50 and appear to have more upward price mobility. Yet, stocks have remained steady based on hope for a better economy in 2008. Much of the hope stems from significant Fed fund rate cuts, and the pending tax rebate stimulus package. However, much of the hope, and equity resilience, can be credited to strong earnings from several leading technology companies.

Equities markets seem to rely heavily on the performance of a few leading companies to help determine the overall momentum and direction for the marketplace in general. During the past few days, stocks have been inspired by strong earnings from leading tech giants such as: IBM, Google, AT&T and Yahoo. In general, many blue chip companies have demonstrated the importance of geographic business diversity. Companies that operate internationally have been fairing much better because of their ability to offset sluggish US sales with growing markets in some global countries.

It is the tech stocks that have really excited traders, however. Many leading equity analysts and market gurus kicked off 2008 with forecasts of a down year for tech stocks. While there have been some companies struggling, many large and small companies have benefited from their global business presence and effective cost control measures to counter decreased US-based sales.

IBM announced its earnings on April 16, and said its profits rose remarkably from $1.21 per share during its first quarter of 2007, to $1.65 per diluted share for the first quarter of 2008. This was a 36 percent rise. Income from continued operations climbed from $1.8 billion to $2.3 billion, an increase of 26 percent. The company easily beat consensus estimates of $1.45 per share for the quarter. As with many other global companies, IBM credited the weak dollar for helping to inflate revenues. Companies that have sold well abroad have benefited by turning the stronger foreign currencies into more dollars. Unlike some other companies, IBM said US sales were up as well, by six percent.

Search engine giant Google really inspired stock late last week when it announced incredibly surprising first quarter earnings after hours Thursday. The company hammered analyst expectation of $3.61 billion in revenue, with its $5.19 billion revenue reported. Earnings jumped from $3.18 per share during last year’s first quarter to $4.12 this year. Google’s stock jumped 17 percent after hours and has climbed another $30 to trade just above $555 per share. The company’s news was especially surprising given that analysts had widely expected internet advertising revenue to shrink in light of the struggling US economy.

AT&T kicked the markets off today with a 22 percent earnings improvement for its first quarter thanks to excellent wireless growth. Apple is among the noteworthy tech companies said to announce earnings tomorrow. It will be interesting to see whether the tech and equities momentum continues. Some companies have forecasted possible slowing during the latter half of 2008. However, US economic conditions could affect the final story greatly.

Yahoo offered a slight surprise with its 37 cents per share earnings reported after hours today. While this was two cents above analyst estimates, some had predicted a good showing after seeing what Google had accomplished. The key question is whether the earnings were enough to prompt Microsoft to increase its takeover bid for the company.

Market Recap

US equities were mostly flat on Monday. The Dow dropped 24 points on the day. The NASDAQ was up 5 points while the S&P was down 2 points. Retail gas prices cleared $3.50 for the first time. Merck and Eli Lilly kicked off the morning with good earnings, while Texas Instruments closed with a profit announcement, but warned on the outlook. AT&T and Yahoo were among the positive earners reporting Tuesday. Oil climbed near $120 per barrel pulling retail gas prices higher. Existing homes sales fell in March. Overall, equities were down Tuesday. The Dow dropped 104 points, while the NASDAQ and S&P were down 31 and 12.