Earnings seasons are always the best times of the year to be researching stocks. I have a number of benchmark stocks that I very much look forward to reviewing and I enjoy reading up on these companies even if I’m not contemplating them for investment.

One of the benchmark stocks that I always review is Union Pacific Corporation (NYSE/UNP). Following this company is a great way to get a feel for the industrial economy. The railroads are also a key indicator for the stock market where Union Pacific is the market leader within the group. The company’s shares have been an amazing wealth creator since 2005. The stock got cut in half during the financial crisis (like the rest of the stock market), then tripled over the last three years with a solid dividend yield between two percent and three percent. I expect Union Pacific to report another great quarter, particularly as automobile shipments are accelerating. We could see some weakness in coal shipments due to competition from natural gas, but on balance, business at the railroads is very good.

Another one of the benchmark stocks that I always keep an eye on is International Business Machines Corporation (NYSE/IBM). The company reports shortly and its shares have been amazingly strong on the stock market for the last couple of years. Large-cap technology has definitely been the stock market’s leading sector this year and I always want to know what both IBM and Intel Corporation (NASDAQ/INTC) say about their businesses. If we get better-than-expected earnings results in large-cap technology, I think the stock market has a good chance of moving higher, perhaps by another 10%.

And there are other benchmark stocks that I think are very important to follow. Automatic Data Processing, Inc. (NYSE/ADP) is one of the best market indicators regarding the employment situation. A payroll processing and human resource business is literally like having a finger on the pulse of the U.S. economy. Automatic Data Processing has done well on the stock market over the last 18 months, as institutional investors have been betting on a recovering economy. Automatic Data Processing is a great benchmark stock to follow also because the company reports a number of private sector surveys about U.S. employment and this information moves the stock market.

Finally, I can’t get through an earnings season without reading up on a few consumer goods companies, such as PepsiCo, Inc. (NYSE/PEP) and Colgate-Palmolive Company (NYSE/CL). Johnson & Johnson (NYSE/JNJ) is an important benchmark stock representing both consumer and pharmaceutical goods. I find it very useful to read up on companies whose products I use every day. (See PC-03-23-12 Want to Know the Market’s Best Stocks? Look For The Best Brands.) Colgate-Palmolive is one of the best long-term wealth creators in the stock market and it’s done so selling toothpaste and soap.

No analysis of the marketplace would be complete without reviewing the numbers from an integrated oil and gas benchmark stock. Oil remains a huge part of the economy and the stock market. What ConocoPhillips (NYSE/COP), for example, says about its business is telling. The company’s numbers are usually great, but production is slowly going down. It’s not for a lack of effort on their part; it’s just that we’re actually running out of easy-to-produce oil.

As I say, following some benchmark stocks is a great way to hone your stock market view, even if you’re not considering a particular company for investment. It’s not difficult at all to look beyond the headline numbers and get a decent feel for how a business and industry is doing. Following benchmark stocks helps provide clarity through all the noise.

There are a number of benchmark stocks that I follow and, even though I may not own them, these stocks are very good indicators either for a specific industry, the economy in general, or the stock market.

 One company that I feel is an important benchmark stock to follow is Automatic Data Processing, Inc. (NASDAQ/ADP). This well-known payroll and human resources outsourcing company provides a great barometer on the Main Street economy and the U.S. employment picture specifically. The stock corrected along with the broader stock market to $45.00 per share in the third quarter of last year, then recovered smartly back above $50.00 per share. Now the stock is trading at approximately $55.00 per share and it recently hit a new 52-week high of $57.10 per share. As a benchmark stock, this performance is telling.

 Automatic Data Processing’s quarterly results last year were very solid considering the state of the economy and earnings held up well. Just in the last 30 days, a number of Street analysts increased their earnings estimates for Automatic Data Processing’s next two quarters and its upcoming fiscal year. If a benchmark stock like Automatic Data Processing is trading right near its 52-week high, then, in my mind, it’s one more sign that the U.S. economy is moving in the right direction, albeit slowly.

Another benchmark stock that’s always worth keeping an eye on is IBM Corporation (NYSE/IBM), which has proven to be an outstanding wealth creator on the stock market, especially recently. It truly is impressive to see a $200-billion-dollar company appreciate so much on the stock market. This stock has been going up, virtually in a straight line, since September of 2010. Back then; it was trading around $125.00 a share. Today, the stock is priced right at its all-time record high of $194.00 per share, trading at about 15 times trailing earnings. This to me is impressive. IBM is a benchmark stock that’s been a big help to the Dow Jones Industrial Average. Wall Street analysts are continuing to increase their earnings expectations for IBM. In the last 30 days, 18 analysts increased their earnings estimates for IBM for all of 2012 and eight Street analysts revised their numbers upward for 2013. IBM’s performance is another good sign regarding the health of corporate America and the technology sector. (See What Early Reporting From the Technology Sector Reveals.)

 One benchmark stock in which I would like to see a breakout is General Electric Company (NYSE/GE). The stock market hasn’t been very kind to General Electric since October of 2007 and the company’s share price performance can definitely be used as a leading indicator on the global economy. This stock has basically been trading between $10.00 and $20.00 a share since the stock market low of March 2009. A handful of Street analysts recently increased their earnings expectations on General Electric slightly, but the company is still stuck in a slow growth environment. However, I would add that any meaningful and sustained breakout above the $20.00-per-share level would be a very positive development for this benchmark stock and the rest of the stock market. General Electric proved to be a good leading indicator for the global economic slowdown and should therefore be a good indicator of its recovery.

 I find it very helpful to follow benchmark stocks, even if I’m not planning on taking on new positions in the stock market. Tracking these companies helps hone your stock market view and see where the leadership is or isn’t in the marketplace. I would bet that IBM and Automatic Data Processing keep ticking higher over the coming quarters and that General Electric will stay in its long-run trading range. The near-term trading action in the stock market continues to look positive, but, like the economy, not all sectors are participating.

There has been a change in leadership at Research In Motion Limited (NASDAQ/RIMM) after the resignation of the company’s co-founders Mike Lazaridis and Jim Balsillie.

And, while the investment community was pleased to see a change at the top and was hoping for a visionary to turn around the ailing “BlackBerry” in its life and death battle against the Apple Inc. (NASDAQ/AAPL) and “Android” devices, there was no extended search for a new leader. Instead, the new CEO, Thorsten Heins, who is also the former COO, has been given the daunting task of reversing the company’s fortunes, but his appointment is not drawing rave reviews on Wall Street. The future clearly is cloudy, as the company really needs a visionary and “go to” guy and I’m not convinced that an operations specialist will be able to right the ship.

The reality is that Heins may be better than the Research In Motion (RIM) co-founders who appeared to be caught off guard by the rise of Apple, but he is likely not like the late Steve Jobs or Richard Branson of Virgin Media, Inc. (NASDAQ/VMED). However, only time will tell if Heins can offer something different. The reaction by investors indicates pessimism with selling in the stock.

So, while Apple is moving along with innovation and creative products, the BlackBerry is vulnerable to being crushed in the wake of not only Apple, but also a host of Android and “Windows”-powered smartphones and devices.

As an investor, I would stick with Apple—the best of breed. The company is the largest company in the world, with an astounding market cap in excess of $394 billion, which would rank it 27th on the International Monetary Fund GDP rankings for 2010, between Iran and Austria. By comparison, RIM’s market cap of $7.64 billion is tiny. In fact, Apple has $25.95 billion in cash and no debt, so it could easily take out RIM if it wanted to. But Apple doesn’t have to do this, as its “iPhone” and “iPad” have garnered worldwide acclaim and are seen as sexy products, while RIM’s BlackBerry may be dying a slow death and its “PlayBook” tablet is essentially dead in the water, with no chance of competing against the iPad.

Apple has made many investors rich. I added a position in Apple for my Daily Profits online trading service at $87.00 in November 2008, with the stock up 387% since. That’s not that bad, but I was somewhat late the game in catching Apple before it began to move higher.

Investors recognizing this great opportunity in 1997 when Apple was trading at around $3.56 would have made nearly 120 times their money. An investment of about $13,000 in Apple in 1997 would make you a millionaire. A $100,000 investment is worth nearly $12.0 million!

Given this, I kind of wonder if I should have used the $100,000 I put down on a house in 1997 and instead bought shares of Apple. That’s what makes trading exciting.

We have seen an impressive start for stocks to begin the year, specifically the technology sector, with the NASDAQ up nearly seven percent. Read what I have to say in Technology Stocks: Invest in Them or Run for the Hills?

One of my benchmark stocks for the stock market and the technology sector in particular is Oracle Corporation (NASDAQ/ORCL). The same way a company like Hewlett-Packard Company (NYSE/HPQ) would represent the retail technology industry, Oracle represents that corporate, institutional software sector and is a leader within the entire information technology industry.

Currently regarded as the world’s third largest software company, Oracle disappointed the stock market with its fiscal second quarter ended November 30. The company’s software revenues grew only two percent in the latest quarter and missed the consensus estimate. Earnings (excluding some items) came in at $0.54 per share, coming in weaker than the consensus estimate of $0.57 per share. This doesn’t bode well for the large-cap technology sector.

I follow a number of benchmark stocks, which I view as very helpful in honing my own stock market view. Like a broad, stock market index, I keep a weekly eye on about a dozen big-cap companies (most pay dividends) from a variety of industries. I follow several conglomerates, consumer products companies, technology firms, oil and gas, and pharmaceutical and railroad companies. As benchmark stocks, I keep track of their corporate developments and I can tell you that this process is very helpful in defining my stock market outlook. It also helps keep track of which industry sectors are doing better than others.

Right now, I would avoid the technology sector. While some companies are doing relatively well on the stock market, such as International Business Machines Corporation (NYSE/IBM) and Apple Inc. (NASDAQ/AAPL), a lot of other benchmark stocks within the sector are not. This would include: Hewlett-Packard, Dell Inc. (NASDAQ/DELL), Advanced Micro Devices, Inc. (NYSE/AMD), Juniper Networks, Inc. (NASDAQ/JNPR), and Research In Motion Limited (NASDAQ/RIMM) to name a few. The stock market, in my view, reflects the choppiness of the real economy. Some industry sectors are doing better than others, with only a handle of companies really outperforming.

This is why it’s important to follow benchmark stocks like Oracle, Intel Corporation (NASDAQ/INTC) and Hewlett-Packard. These three companies alone will give you a tremendous insight into the health of the technology sector, both at the retail and corporate level.

Whatever you might consider to be benchmark stocks, it pays to keep following them, even if you aren’t very interested in taking on a position. The strategy behind keeping track of your benchmark stocks is to discover the real economic trends that are taking place in important industries. Like railroad carloading rates or hard disk drive shipments. All these data are extremely useful because, for the most part, the headlines don’t report it. Media reports generalities about the stock market and corporate developments, but they rarely dig past the headlines. (See Debt Crisis Aside—Let’s Get Down to Business with the Real Numbers.) This is how you can be confident taking on or avoiding positions in the stock market.