The European debt crisis and the specter of slowing growth worldwide continue to take a toll on corporate profits, with third-quarter earnings for S&P 500 companies now seen falling year-over-year, Thomson Reuters data showed on Thursday.
Third-quarter earnings are expected to fall 0.1 percent, a sharp revision from the 3.1 percent growth that was forecast on July 1.
The more pessimistic view followed a string of disappointing results, including from Apple Inc (AAPL.O), and a series of cautious forecasts.
A number of tech companies have recently cut their outlooks, including Texas Instruments Inc (TXN.O), Intel Corp (INTC.O) and Applied Materials (AMAT.O), but the pain has been spread across sectors, with multinational firms especially feeling the hit.
On Thursday, United Technologies Inc (UTX.N) cut its full-year profit view to essentially unchanged from 2011's profit.
United Tech, along with most of the other companies offering more conservative views, cited slowing growth in China and lower demand from Europe as the primary reasons for its caution.
With 43 percent of the S&P 500 having reported results for the second quarter, companies posted 6.1 percent growth, on a par with expectations of 6 percent growth at the beginning of July.
About 65 percent of companies have topped earnings forecasts this quarter, slightly better than the long-term average of 62 percent.
The revenue picture has been much gloomier. Only 43 percent of companies have reported stronger-than-expected sales, the weakest reading since the first quarter of 2009 and only the fourth time in the past ten years that the beat rate was under 50 percent.
(Editing by Kenneth Barry)