Most stocks were down somewhat today as markets focus on various risks including lower earnings and the Europe situation and excess government debts…
One stock on the rise was Research in Motion (RIM), up 6.0% to $8.15.
Regarding Corporate earnings, the trailing earnings on the S&P 500 as of Q2 reports was $87.92. At the end of Q4 2011, that figure was $86.95. So that is only an annualized gain of 2.2%, which is pretty weak. On an operating earnings basis the annualized gain in the first six months of 2012 was 4.6%. Projections are that Q3 earnings will be up only 2.9% versus 2011 and on an operating basis will be down 1% from the prior year. All else equal this could put negative pressure on stock prices especially as the Q3 earnings get reported. In theory these projections are already baked in tot he current market index level and so what really matters is whether the earnings come in lower than or better than expected. However, all else is never equal and often reported earnings are not the biggest drivers of stock prices in a particular quarter of the year.
Keep in mind that some companies will continue to report strong earnings. I expect (but certainly can’t guarantee) that the higher rated companies on our list above and certainly those which I own most heavily will tend to report higher earnings growth that the S&P 500 index average.