Earnings are making their biggest splash in the stock market in years.
Investors are sharply bidding up the shares of companies that beat expectations—and appear more willing to overlook some of the misses—helping to pull the stock market out of its recent lull. The S&P 500 set three record closes last week, its first new highs since July.
Shares of companies that topped forecasts rose an average of 2% in the two days after reporting results, beating the five-year average of 1%, according to data compiled by FactSet. Those that fell short have averaged a 2.1% pullback, below the half-decade average of 2.6%.
So far, the winners are outpacing the losers. More than three-quarters of the 358 companies in the index that reported through Friday have beaten estimates. And 66% have risen in subsequent trading sessions, a five-year high.
Industrial equipment maker
, motorcycle maker
and chip maker
are among the companies that have topped estimates and enjoyed a subsequent rally in their shares. Shares of several companies that missed forecasts, including retailers like
Dollar General Corp.
, also rallied.