The consensus of an improving housing market has gained more credence as data released this morning shows new home starts increased 6.9% in June from the revised May estimate of 711,000. Right now any growth is good growth, unfortunately the only confirmation out of Ben Bernanke during his two-day testimony is of anemic economic growth and slow progress toward alleviating unemployment. The Fed chairman does not see the United States entering a double-dip recession, but with GDP growth expectations under 2%, the markets cannot take much comfort in the prediction.

Fortunately, the markets are up as investors are encouraged by the string of optimistic earnings reports.

Index

Gain/Loss

Gain/Loss %

Dow Jones Industrial Average (INDEX: ^DJI) 73.83 0.58%
S&P 500 5.83 0.43%
Nasdaq 25.27 0.87%
WTI Oil Futures 0.52 0.58%

Source: Yahoo! Finance.

Earnings continue
Intel (Nasdaq: INTC) is leading the Dow pack after releasing second-quarter earnings after the markets closed yesterday. The chip maker lowered its growth forecast for the remainder of 2012 to a range of 3% to 5%. However, Intel is up 3.28% on the day, as analysts expected slower growth out of Intel and the PC industry. The 3% to 5% guidance shows that life still exists in the industry. Dow component Hewlett-Packard (NYSE: HPQ) is up 1.85% on the news.

Bank of America (NYSE: BAC) announced earnings before the markets opened today, with second-quarter profits of $2.1 billion, or $0.19 per share. Although earnings beat analyst estimates, the bank is trading 4.8% lower today after announcing revenue dropped heavily in all of its business lines. Furthermore, with uncertain economic growth, B of A said 2012 could be weaker than originally planned.

Pharmaceutical companies were expected to release sound numbers this earnings season, but that was not the case with Abbott Laboratories (NYSE: ABT), down 0.68%. Earnings declined 11% from the same quarter last year as sales were bogged down by a strengthening dollar. Abbott confirmed its outlook for the year and does not expect this past quarter to derail its campaign.

Long-term outlook
A surprising number of companies are beating estimates so far this quarter, but the unexpected bottom lines are not caused by unanticipated second-quarter growth. The upended numbers are thanks to the extremely low estimates from analysts. Today's good news is not correlated with an improving economy; rather, it shows how negative the economic outlook currently is. With more potential buying opportunities, now would be a great time to check out The Motley Fool's special report: "3 Stocks That Will Help You Retire Rich." This free report will list three remarkable companies as well as offer great advice on how to invest to secure a comfortable retirement. Get your free report now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.