matt nesto is here. >> better-than-expected factor is still pretty strong. north of 75%. 76. >> in terms of beating expectation. >> exactly. better than expected. if you take a look at any changes that we've seen, surprise factor, the degree at which the earnings have come in better than expected is now 21%. it was 19% yesterday. >> do i understand that, they've beaten estimates by 21%. >> on average. the average is 21% on eps. i don't have the revenue yet. >>> if you take a look at some of the big sectors and what's moved just from day to day, the financials, again, they went into the quarter an a plus 59 reading. >> with huge expectations that they were going to have a massive rebound. >> supposed to be positive. to 59 was up to 100 yesterday. it's up to -- >> wait, wait, wait. so the expectations were that financials very going to see an approval of earnings but thus far it's been an improvement of 118%? >> yes. >> wow. >> if you take a look at materials they went into the bottom of the pack. they were supposed to be down at 68. that's firmed up to minus

up next, matt nesto takes over the expectations. the risks that lurk beneath better than expected earnings. back in a moment. >>> time now for going global asia. >> we're just getting started here in asia, and here are the stories to watch. reserve bank of australia makes an interest rate decision later today. speculation swirling in sydney that the central bank could hike rates in more positive dollar and revival in demand for labor. >>> for managers of the biggest hedge funds in asia are having a conference in hong kong. we'll get their perspective on markets going forward and where they're allocating their funds. managers are increasing their focus on asia and hong kong has emerged as the world's biggest hedge fund center. >>> china's premier visits north korea. we'll keep an eye on talks that are expected to include top-level discussions about the north's nuclear weapons program. >>> tune in to cnbc world and catch all the action overseas at cnbc asia headquarters. going global with your money. tdd#: 1-800-345-2550 i want everyt

for that we go to matt nesto back at hq. >> thanks so much.e're checking on this marketplace and seeing a sharp rebound in financials. we talked about the upgrade of that group and some of the key names at goldman sachs here today. check out dow chemical. this is the best performer in the materials group, worst performer sector since the sell-off began 2 1/2 weeks ago here today. so dow chemical very, very strong. leading the materials. interesting, if you look though at who really held up in the material space during that three-week period of intense pressure and selling, the laurels with a px. something the military thinks that px stands for something else. but praxair is strong, up 1%. interesting h interestingly, it's the only positive stock in that period of time in the materials space. also worth a note here today topping all of the upgraded banks, all of the regional banks is the credit card king capital one financial. one of the best performers of the s&p 500 here today. i guess just to be fair, i mentioned whole foods earlier the best

matt nesto with the lowdown on the little guys. >> yeah. i'm a little guy, maria, right? if you take a look at the small caps here today, and really since the trough and since the second quarter earning season came and went, you're going to see a group that has vastly outperformed a group that some say is vastly overheated. that's why brian caught my attention here today. he says there's actually really a transition going on here today in terms of growth momentum. it is shifting and will continue to shift not only through the third quarter, but especially more so in the end of the year, and into 2010. but from the large caps to the small caps. .7% is the estimate versus a 25% on the day. the decline we're looking for on the large caps, interesting, he says that analysts continue to underestimate the economic recovery. and therefore, underestimate the earnings growth that would go with it. and then lastly, i mentioned 2010 and on. the small cap growth is ratcheted in at about 50%, which is double what analysts are looking for for the s&p 500 right now. for this quarter, he

. >> thanks so much, matt nesto. this is it for "the call." >> thanks for watching, everyone. is up next. >>> four conde nast closing four magazines. >>> the supreme court has rejected an appeal of an insider trading conviction. we're first in business worldwide. i'm courtney reagan. >>> dire straights is british. >> who knew? >> was that a vegamite reference? >> that was australian. >> you said they were american. >>> welcome to "power lunch." stocks have been pushing a little higher so far today on positive economic data, especially as it pertains to the services sector of the economy. financials have been leading the way higher. jp morgan and american express have been leading the dow so far today. >> i'm sue herera. bank of america's sally krawcheck. we talk markets, and b of a's search for a new ceo. that big interview co

harry clark, and matt nesto. good to see you both, gentlemen. harry, what are you looking for this earnings season? >> you know, so far, maria, it's been good. only a few reported 4-1. that's a nice ratio if you keep it up. next week's an interesting week as you know. i think ibm will come out with something around the estimates. they don't surprise very often. but you know, jpmorgan and j & j's estimates are pretty darn low. they could surprise on the upside pretty big. which would be very positive. >> but matt, we're still talking about a decline from a year ago. if you look at the thompson reuters numbers, or s&p, we're still talking about declines in terms of profitability. >> and revenue, maria. that's what everyone's talking about. goldman sachs pointed out the second-quarter revenues was the worst we've seen since 1970. if you take a look at this quarter, things are supposed to improve to only a 15% decline. so even if we come in 25% better than expected, we're still looking at revenues to be down from what was a nightmare of a period a y