The Dow Surge

The Dow Jones average was up by more than 100 points on Friday, bringing the index all the way back to even on the year. As we've said many times, the media's reasoning as to what moved the market on any particular day is usually little more than guesswork, but it's clear what happened on Friday: earnings. Look at some of the reports we just had:

* Caterpillar's second-quarter profits came in at $1.09 a share, easily beating the analysts' estimates of 84 cents a share. Its stock gained nearly 2 percent on Friday and is up 19 percent on the year.

* 3M beat analysts' estimates by posting a second-quarter profit of $5.80 a share; its second-quarter net income was up 43 percent over last year.

* UPS posted second-quarter profits that were up a whopping 90 percent. Its per-share profits of 84 cents beat the analysts' estimate of 77 cents.

So that's strong performance from three companies that are not just Dow stocks, but macroeconomic bellwethers. Most of their business derives from the success of other businesses. If these three companies are doing well, that's a sign of strength throughout the economy.