The results boosted stock markets since they were seen as an indication that the health of the US banking sector, the source of much of the financial turmoil that spread worldwide over the past year, was better than feared.

Some economists have said over recent weeks that the world is entering a twilight zone of conflicting signs, with key indicators lighting the way to a recovery even as grim company earnings statements and job cuts continue.

The US, the source of much of the financial turmoil at the root of the downturn, is widely seen as the place to look for signs of economic turnaround which may filter through to other economies.

But Howard Wheeldon, top analyst at BCG Partners, warned that the US still faced challenges due to its high deficits and debt.

“Recovery for the US economy is an imperfect science,” Wheeldon said. “Solve one problem and another occurs.”

Source: AFP