Biggest worry today: another fade into the close. It’s happened five of the last seven trading sessions.
Elsewhere: give the Street some credit. One month ago, as the fourth quarter was starting, traders began lightening up on their positions in financials and retailers. At that time, there was still some hope that the third quarter would be the “kitchen sink” quarter for banks and brokers; that is, there would be few if any additional charges for losses on subprime related issues in the fourth quarter.
Wrong. That idea has been confined to the ash heap of history. Analysts have been taking down estimates for these two sectors for the past few weeks, but the decline in earnings estimates has accelerated recently.
Here are the numbers for fourth quarter earnnings so far:
S&P 500: up 3.0% (from up 11.5% Oct. 1)
Financials down 20% (from up 0.7% Oct. 1)
Consumer disc. up 15% (from up 22% Oct. 1)
These are statistically significant declines.
Once again, the Street was ahead of analysts by several weeks.
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