Earnings to Beat Expectations: Poll - TheStreet

Earnings to Beat Expectations: Poll

With earnings season off to a strong start, TheStreet readers expect the winning streak to continue.
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NEW YORK (

TheStreet

) -- Earnings season got off to a roaring start on Monday with

Alcoa

(AA) - Get Report

and

CSX

(CSX) - Get Report

beating analyst expectations. With a little momentum behind it and earnings expectations riding high, the stock market is on track for its biggest winning streak in three months, up about 7% since its July 2 lows.

While it might be too early to tell based on the results of just Alcoa,

our recent poll

indicates that investors believe earnings will beat expectations this quarter.

TheStreet

readers were asked to predict if earnings will beat, meet or fall short of expectations. About 48% of the survey's 371 respondents, or 178 users, said earnings will beat expectations. About 26% felt earnings will meet expectations and an equal number predicted earnings will fall short.

Investors recognize that, aside from a string of stronger than expected earnings results in the coming weeks, there are currently precious few other catalysts capable of sparking an equity rally. While positive news has started trickling out of Europe and China, economic data has so far suggested that the recovery will be slow. On Tuesday, data showed that the U.S. trade deficit in May unexpectedly widened 4.8% to $42.3 billion.

But valuations, particularly among tech stocks, are also low, which means expectations have been lowered considerably and companies may actually surprise. Late Monday,

Chevron

(CVX) - Get Report

said that it expects improving refining margins to lift profits.

Intel

(INTC) - Get Report

is also expected to report strong results on Tuesday.

While companies may surprise, investors should listen carefully for any tone of caution in earnings outlooks, as that may offer the best clue to determining whether earnings growth is for real or a temporary bright spot.

-- Reported by Shanthi Venkataraman in New York.

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Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.