Arab Today, arab today earnings reality sinks us investor hopes
Last Updated : GMT 00:58:51
Arab Today, arab today
Arab Today, arab today

Earnings reality sinks US investor hopes

Arab Today, arab today

Arab Today, arab today Earnings reality sinks US investor hopes

New York - AFP

A reality blast of disappointing earnings from a clutch of US business heavyweights wiped out midweek gains Friday as US markets suffered another poor week. While the broad-based S&P 500 index managed to squeak out a gain for the period, the feeling at the end was distinctly bearish, an extension of the previous week when the markets turned in their worst performances in four months. Amid reports by Google, McDonald\'s, AMD, Microsoft, General Electric and others, it was revenue falls more than net earnings disappointments that directed sentiment, together with lowered forecasts blamed on the slowing global economy. For the week, the S&P 500 gained 0.32 percent, ending at 1,433.19 after a 1.7 percent loss on the final day. The Dow Jones Industrial Average managed an 0.11 percent gain to 13,343.51. The Nasdaq Composite took a stronger hit from Microsoft\'s slowing revenues, Google\'s sharp earnings downturn and worries about Apple\'s sales in the current quarter. The tech-heavy market lost 2.2 percent on Friday, to leave it with a 1.26 percent loss for the week. It was still better than the previous week\'s two percent-plus losses on the three key indices, but there was a change of character. Macroeconomic news was thin during the week as well, though relatively positive: inflation is still moderate, more signs of regional growth came in, and the housing sector is strengthening. Nevertheless, that wasn\'t what got the attention of traders. \"Last week, it was a macro pulldown; this week, more dragged down by corporate news,\" said Art Hogan of Lazard Capital Markets. \"We came in with a much more upbeat tone,\" but that disappeared with the quarterly earnings reports, he added. Google set the tone of the week, with the Internet giant losing 8.5 percent after reporting a 20 percent plunge in net profit, to $2.18 billion, for the third quarter. Earnings per share adjusted for special items amounted to $9.03, far below Wall Street expectations of $10.65 per share. Hogan suggested the picture could be better in the upcoming week. \"On balance, the earnings season gets more diverse next week. This one was more technology focused, which hasn\'t fared well.\" Also, next week will see the government\'s first estimate of third quarter economic growth -- the average forecast is 1.9 percent -- and a two-day policy meeting of the Federal Reserve, which on Wednesday will reveal their view of the economy\'s process. Taking a broader view, John Praveen of Prudential International Investments Advisors remained bullish, saying the big market worries -- the eurozone crisis and the harsh \"fiscal cliff\" budget cuts and tax hikes slated for year end -- would be addressed by policy makers and the European Central Bank. The third quarter\'s rally \"is likely to continue into 2012 year-end, supported by the stimulus injected already injected in Q3 by the Fed,\" he said. \"The ECB\'s bond buying plan is likely to be activated for Spain and Greece is likely to get a reprieve. \"Further, once the US elections are over on November 6th, a deal on the fiscal cliff is likely to be struck.\" Such a deal, he said, could slow growth somewhat but avoid sinking the economy altogether.

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Arab Today, arab today earnings reality sinks us investor hopes Arab Today, arab today earnings reality sinks us investor hopes

 



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