Goldman Strategist Says U.S. Earnings Are `Awful'

[marmar]

from Bloomberg:



Goldman Strategist Says U.S. Earnings Are `Awful' (Update2)

By Alexis Xydias

April 14 (Bloomberg) -- The U.S. corporate earnings season got off to an ``awful'' start and stocks will continue to fall, according to Goldman Sachs Group Inc.

``Early signs are awful,'' a team led by New York-based David Kostin, Goldman's U.S. investment strategist, wrote in a note today. ``We expect generally disappointing results and a swath of lowered profit guidance that will drive the Standard & Poor's 500 Index lower in coming weeks.''

Futures on the S&P 500 lost 0.6 percent as of 8:11 a.m. in New York after Wachovia Corp., the fourth-largest U.S. bank, reported an unexpected loss on subprime-infected mortgage holdings and slashed its dividend.

The S&P 500, the benchmark index for American equities, dropped 2.7 percent to 1,332.83 last week after General Electric Co. said the credit-market crisis caused an unexpected earnings decline, while slowing economic growth and rising energy prices eroded profit at United Parcel Service Inc. and Alcoa Inc.

Kostin, 44, last month said he expected the S&P 500 to fall to 1,160 in the ``near term'' before rebounding to 1,380 by year's end. His predecessor as Goldman's chief forecaster for the U.S. stock market, Abby Joseph Cohen, in December had predicted the S&P 500 would reach 1,675 in 2008.

Cohen, 56, was known for her bullish predictions during the 1990s at New York-based Goldman, the world's biggest securities firm by market value.

Analysts' Estimates

Analysts surveyed by Bloomberg have cut their projections for first-quarter earnings at S&P 500 companies every week since Jan. 4. They now predict a 12.3 percent drop, compared with an estimate for an increase of 4.7 percent at the start of 2008.

Alcoa marked the start of the U.S. earnings reporting season on April 7 when it became the first company in the Dow Jones Industrial Average to post results. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=abVJmlzaDPMg&refer=home

[xchrom]

1. recommend

[gratuitous]

2. Maybe obliterating the middle class wasn't such a good idea?

Who knew? :shrug:

[SpiralHawk]

3. The Republicon Recession kicks America in the ass

eom