A second quarter earnings season that initially showed so much promise quietly tailed away at the end, raising questions about corporate profitability through the end of the year.
While the bottom line for S&P 500 companies exceeded muted expectations, guidance was decidedly negative, threatening to spoil a second half that some had anticipated to represent a turning point for the economy.
"While we expected second-half ... earnings season to be less positive than the first half, we are disappointed that the improvement in earnings guidance trends recorded earlier in earnings season is now gone," said Nick Raich, CEO of the Earnings Scout. "By no means are we suggesting this has been a disastrous earnings season. However, it is no longer a very good one, either."
For the normally bullish Raich, that represents a change in tone.
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Even as profit growth looked modest and revenue gains were nearly nonexistent, he touted the importance of looking at the direction of earnings rather than merely absolute growth levels.
Now, though, Raich thinks the weak August stock market performance is a reaction in part to a discouraging profit outlook.
"The bad news is that we believe a near-term correction in equity prices is justified by the recent decelerating earnings and economic trends," he said. "The good news is our research still indicates U.S. profit growth will reaccelerate in the second half of the year, albeit at a gradual pace."
If his good news scenario comes to pass, it will have overcome some weak momentum.
Second-quarter earnings started off strongly, with companies in the first half posting 7.1 percent earnings growth and 4.5 percent revenue gains, the latter number in sharp contrast to a flat top-line forecast ahead of the reporting period.
In the second half, though, things turned sour.
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Earnings per share growth slid to 5.6 percent, and sales improved just 1 percent.
Moreover, the outlook ahead turned even gloomier, with revisions at negative 2.65 percent, the worst all year. Projected earnings for materials suffered most, with a minus 6.2 percent revision decline.
The season is nearly over. Almost all S&P 500 companies have reported, 65 percent of them beating forecasts, according to S&P Capital IQ.
Wall Street, though, is beginning to get jittery over prospects in the third and fourth quarters.
"Analyst expectations for top line growth in the back half of 2013 continue to fade, and our worries over a looming revenue recession grow commensurately," said Nick Colas, chief market strategist at ConvergEx.
Colas pointed out that among the 30 companies in the Dow Jones industrial average, revenue fell 0.6 percent in the first quarter and gained just 0.3 percent in the second.
"It hasn't been hard to find earnings growth in corporate America. Profit margins ... are within basis points of cyclical highs," he said. "It has been revenue growth that has gone missing since the nominal end of the Great Recession."
"Revenue growth is the real gas-down-the-carburetor that gets equity investors enthusiastic about stocks, rather than just viewing them as the least-bad investment alternative in their basket," Colas added. "By that count, the current year is proving disappointing."
He sees three worrisome points for the future: Valuations at 15 times earnings no longer look cheap, particularly considering the slow, looming withdrawal of Federal Reserve stimulus; investors are beginning to look for "old school" catalysts rather than simple multiple expansion and cheap interest rates; and, perhaps most importantly, the idea that U.S. stocks are the only investment alternative is beginning to wear thin.
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"Frankly, to me that sounds more like the response of a tired spouse being threatened with divorce at the end of an evening's quarrel than a well-considered investment thesis," he said of the "where else are you going to go?" mantra. "It might work as a reason to stay invested—or married—for a short time. But not for the long haul."
—By CNBC's Jeff Cox. Follow him
@JeffCoxCNBCcom on Twitter.