Prospects dim for U.S. earnings

NEW YORK World shares and oil prices fell Monday on worries about dim growth prospects for the global economy and on expectations for a weak U.S. corporate earnings reporting season.

Jitters over the eurozone debt crisis knocked the euro down from two-week highs, with uncertainty about Spain persisting after a eurozone finance ministers’ meeting in Luxembourg said the country did not yet need a bailout.

The lacklustre tone in markets was set early after the World Bank cut its growth expectations the East Asia and Pacific region, including economic powerhouse China.

Heading into the U.S. thirdquarter corporate earnings reporting season, analysts forecast earnings will fall 2.4 per cent from the year-ago quarter

That would mark the first decline in three years and make it difficult to justify keeping U.S. stocks near recent peaks.

Recent warnings from large multinationals such as FedEx Corp., Hewlett- Packard Co. and Caterpillar Inc. have made investors wary.

On Wall Street, equities trading volume was the lowest this year on Monday as the U.S. government and bond market were closed for Columbus Day.

“Certainly there have been a lot of downward revisions in earnings in general,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Ill. “Some people are predicting that we may see an overall decline in earnings, so there may be some defensive posturing and profit-taking.”