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OPINION

The Battle Ground

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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The stock market continues to exhibit amazing resolve climbing off the canvas for the second consecutive session. Despite early ninety point plus declines, the stock market rallied into the plus column by the close. Actually, the Dow Jones Industrial Average has been the battle ground for bulls and bears as the other major indices have been robust from the opening to the closing bell. The big names have their issues, but most have earned the benefit of the doubt from investors. So, when the CEO of Caterpillar says things are getting better and he feels confident, nobody cares about the huge miss and subsequent lower guidance.

In a sense this is what investing is all about - the benefit of the doubt.

Of course the basis for such benefit has to be trust and there still isn't a lot of trust. It is right not to trust Wall Street, but the question is should we trust corporations? I think this is more complicated than trusting the folks in the lower canyons of Manhattan, but the answer is yes-trust publicly traded companies to try to earn money for their shareholders. Obviously there are and always will be bad actors, but for the most part you are essentially trusting the nature of survival, competition, and greed.

Businesses want to survive, and the best way to do that is to provide the best products and services, or mediocre stuff at a hell of a discount, but the former is the better way to go and the one that generates the biggest profits. But individual investors aren't buying it ... any of it.

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The thing is while Main Street continues to ignore the rally, for many reasons the pros are head over heels. According to Barron's semiannual Big Money Poll among professional investors, 74% are bullish or very bullish, by far an all-time high reading. Moreover, one third see the Dow reaching 16,000 by the middle of next year. Much has been made of individual investors getting it wrong all the time, and while some of that's hyperbole currently the would-be individual investor is also the dissatisfied business owner, taxpayer, homeowner and voter that feels angst from many different directions.

These are legit issues, but there is noise that allows people to ignore a part of their lives that at some point will become a much larger issue than domestic policy on social issues, or resentment over a tainted media that is looking to make our children comrades in arms rather than individuals trying to be their best. Sure, there are a number of wars going on at the same time but letting the clock tick away on personal finance, and retirement preparation is a casualty few can afford.

Today's Session

For all the talk of the market being up on money printing it's been clear to me the street wants the rally baton passed to a clearly improving domestic economy. Today's earnings roundup is the first time in a while we can say there are signs of real improvements.

Key Results

DuPont (DD)
Record agriculture operating earnings driven by domestic and overseas demand was the highlight of the quarter. Pricing power was seen in all geographic regions other than Asia Pacific. DuPont is benefitting from a sharper focus on agriculture and nutrition after selling its car paint unit last year and buying a nutritional business in 2011.

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Travelers (TRV)
The company enjoyed top line growth in all its lines of insurance, due in part to pricing power that helped margins increase in all segments. The company has beaten top and bottom lines in each of the last four quarters.



Most corporate earnings out this morning beat consensus, and most did it without accounting gimmicks with several indicating pricing power. These beats cover a wide range of industries.

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