Earnings anxiously awaited

NEW YORK – Inside major Wall Street firms and across their trading floors, concerns about corporate earnings are getting difficult to ignore.

America’s blue chip companies – big business stalwarts like Merrill Lynch & Co. and International Business Machines Corp. – will release third-quarter results in the coming weeks. After a quarter marked by tightening credit conditions and concerns about a slowing economy, profit reports are expected to be the worst since 2001.

And early signs this past week seemed to confirm what many on Wall Street feared: that results will show no growth from the year-ago period. Investors got a pair of profit warnings from International Paper Co. and Chevron Corp., while results from General Electric Co. and aluminum producer Alcoa Inc. failed to impress.

Money managers in charge of multimillion-dollar portfolios believe much more weight will be put on performance this quarter. Not only will individual results be a good indication of the health of corporate profits, but what companies say about the future will be the best indication yet about the economy.

“Right now people are flailing around trying to find out what the economy really is doing,” said Kim Caughey, equity research analyst at Fort Pitt Capital Group. “I am really looking forward to getting on the conference calls that companies have with investors – that is what is going to bring us clarity.”