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Headline: US slowdown looms


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#1 Rogerdodger

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Posted 11 February 2007 - 11:46 PM

MSNBC.Com
The percentage of US companies failing to meet Wall Street's earnings expectations has reached the highest level in more than two years, fuelling fears that corporate America's record run of profit growth will come to an abrupt end. Concerns of a slowdown in corporate profitability – one of the key reasons for the stock market's record-breaking streak – have been heightened by companies' increasingly bearish outlook on business prospects.

More than 22 per cent of the 400-plus S&P 500 companies to have reported results for the fourth quarter of 2006 failed to meet Wall Street expectations. This is the highest level of "misses" since the third quarter of 2004, according to Reuters Estimates.

Analysts forecast a rise of about 5 per cent in earnings of S&P 500 companies in the first quarter of 2007, down from more than 7 per cent two months ago, according to Thomson Financial. "We are going through a big transition in mindset," said Mike Thompson, director of research at Thomson Financial. "We are finally seeing a slowdown in earnings."

Edited by Rogerdodger, 12 February 2007 - 12:01 AM.