So Far, Earnings Reports Point to More Gains

With 113 Standard & Poor’s 500 index companies having reported quarterly earnings so far, analysts and investors say they are pleasantly surprised by the performance of most of them--which may push stock prices, already at records, higher in coming weeks.

This week is the busiest reporting week for the quarter, with Bank of America Corp., Citigroup Inc., IBM Corp., America Online Inc. and Microsoft Corp. among the 150 S&P; 500 names scheduled. With investors optimistic that most companies will match or even beat expectations, the only cap to stocks’ climbing may be bond yields, money managers say.

“It’s not out of the realm of possibility that by mid-August the Dow could be at 11,800,” said Robert Froehlich, chief investment strategist for Scudder Kemper Investments Inc. “We’re at the point where nothing else matters but earnings--if they come in good, the market will rally.”

About 66% of the S&P; 500 companies that have reported earnings surpassed analysts’ expectations. Typically a little more than 50% top estimates. Earnings-growth expectations on a year-to-year basis have risen to 11.4% from the 11% anticipated a week ago, according to research house First Call. That puts this quarter on target to be the best since the third quarter of 1997.