Profit Outlook Skids Lower, Led By Financial Sector
Meanwhile, home improvement retailer Lowe’s expects the weakness in sales to pressure the company’s earnings estimates for the year. The Mooresville, N.C., now expects earnings for its fiscal year ending Feb. 1 to be at the low end of an earlier forecast of $1.97 to $2.01 a share.
The warnings from these retailers raised fresh concerns about the health of the consumer, who so far has continued to spend even in the face of rising economic concerns, falling home values, and a turbulent credit market.
No doubt, investors will be looking for fresh clues in the third-quarter results about how Corporate America will fare.
Expectations are high for a strong finish to the year. Still, investors may have already priced in disappointing earnings news since many S&P 500 stocks are trading at a lower price-to-earnings multiple than has historically been the case, according to Silverblatt.
Another wildcard will be the impact of foreign exchange. The record weakness in the dollar likely came too late in the quarter to be a big boost for third-quarter profits, but it could be factor in fourth-quarter outlooks.
Investors need remember that the S&P 500, makes just over half its profits outside the U.S.
"Overall, you're looking at a fairly flat to basically zero earnings growth quarter-to-quarter, but there are some sectors that are going to provide some positive growth, so you have to be in the right spot at the right time," said Darin Richards, chief investment officer at AKT Wealth Advisors, during an interview on CNBC's "Power Lunch."
Christina Cheddar Berk is a news editor at CNBC. She can be reached at email@example.com.