A Surprise Party For Corporate America

Free-spending consumers fueled an 11% leap in second-quarter profits

What's going on? Just as everyone got used to the idea of declining profit growth, Corporate America uncorked another surprise. Thanks to a consumer-fueled economy that beat expectations, earnings for the 900 companies on BUSINESS WEEK's Corporate Scoreboard rose 11%, to $81 billion, on a sales increase of 8%, to $1.2 trillion. Following two disappointing quarters, the news left many scratching their heads. "Profits numbers have a habit of surprising us to the upside," says John Ryding, senior economist at Bear, Stearns & Co.

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