Fragility aside, recovery by big US names appears to rule out double-dip recession

A slew of the world's biggest companies reported beating forecasts for sales and profits, giving lie to fears that the global economic recovery is already faltering.

Stock markets leapt higher as investors picked through scores of earnings reports from numerous sectors of the economy and while executives expressed caution and noted uncertainty over the future, few predicted a double-dip recession. The fragility of the economic recovery was again under discussion on Capitol Hill yesterday, where US lawmakers were questioning Ben Bernanke, the chairman of the Federal Reserve, for a second day of his twice-yearly report to Congress.

On day one, the central bank boss had warned that the outlook was "unusually uncertain", but he did not depart from his prediction that the US economy will continue to grow modestly. The Dow Jones was up more than 2 per cent by lunchtime in New York, more than erasing the drop that Mr Bernanke's testimony had caused on Wednesday. Traders were heartened by the results emerging from global corporations such as Caterpillar, the heavy equipment maker, 3M, and the airline industry.

Caterpillar's chief executive, Doug Oberhelman, said sales were so strong the company was on track to beat Wall Street's forecasts for the rest of the year, too. "While there are significant economic concerns around the world that we are watching closely, orders have continued to out-pace our shipments and we expect to increase production in the second half of the year," he said.

3M, an industrial conglomerate with operations spanning adhesives, plastics and electronics, but which is still most famous for the Post-it note, also raised its guidance. George Buckley, its chief executive, said: "There will be a period of slower growth in end markets later this year. This isn't a double-dip per se, it's just a soft spot and very normal as economic growth takes a breather for a while."

UPS, the shipping company, whose business activity reflects the strength or otherwise of economic activity, said it had almost doubled profits in the second quarter. And Continental, whose impending merger with United Airlines will turn it into the largest airline in the world, became the latest company from that sector to blow through Wall Street forecasts.

Its revenue jumped 19 per cent to $3.7bn (£2.4bn) as passenger numbers grew and its cargo business also showed a recovery. JetBlue and Alaska Air, smaller rivals of both airlines, also beat expectations on the top and bottom lines.

The positive momentum for earnings was broken last night, however, when Amazon announced second-quarter profits had fallen far short of hopes. The online retailer's operating costs rose sharply, even as it had to slash the price of its Kindle e-reader device to fend off competition from Apple. Amazon shares slumped 13 per cent in after-hours trading.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate