Newspaper article St Louis Post-Dispatch (MO)

Earnings Projections Are Looking Shaky

Newspaper article St Louis Post-Dispatch (MO)

Earnings Projections Are Looking Shaky

Article excerpt

Corporate earnings have helped stocks rocket to new heights this year, but some investors worry that the booster may be running out of fuel.

The past few weeks have been marked by a rash of gloomy earnings projections from a wide spectrum of large domestic companies. Although most pleaded temporary or special circumstances, the announcements unsettled investors who are counting on another quarter of solid earnings.

"Earnings are the key," said John Shaughnessy, research director at Advest Inc. in Hartford, Conn. "If for some reason they start to slow down or even go down, that would certainly be the kiss of death for this market."

Analysts had already said that earnings could not keep growing at the rate of the past several quarters. They expect earnings to be about 17 percent above the third quarter of last year.

That is not a bad growth rate, but it compares unfavorably with the 22 percent growth logged in the second quarter, and the 25 percent in the first. …

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