- Jeff Kleintop, chief market strategist at LPL Financial
A third-quarter earnings season begins in the world's biggest economy, and it is expected to be the worst season since 2009 due to the global economic slowdown and weak U.S. fundamentals. Analysts now expect earnings per share for S&P 500 companies to fall by 2.7 per cent compared to the same quarter in 2011, while three months ago their estimates were for 1.9 per cent increase. It can be the first negative result after eleven consecutive quarters of gains.
"We expect corporate profits will be negative and revenues soft, as the global slowdown and below average economic growth in the US has affected companies," said Jeff Kleintop, chief market strategist at LPL Financial.
"If we see that the markets do not correct even after earnings disappoint and guidance gets worse, then it will be clear that fundamentals have given way to the Fed," said Quincy Krosby, market strategist at Prudential Financial.
The Standard & Poor's 500 plunged 0.35 per cent to 1,455.88. The Dow Jones Industrial Average fell 0.19 per cent to 13,583.65. The Nasdaq Composite decreased 0.76 per cent to 3,312.35.
© Dukascopy bank SA