While pessimism still weighs heavily on global equities and exchange traded funds, third-quarter earnings season may provide the catalyst for the next move in stocks.

SPDR S&P 500 ETF (NYSEArca: SPY) lost ground Friday and is down about 12% over the last three months.

With heightened uncertainty and volatility, market predictions have been more guarded and conservative, reports Ian Thomson for the Dow Jones Newswires.

Wall Street has lowered its 2012 earnings expectations, according to Barry Knapp, chief U.S. equity strategist at Barclays Capital.

Barclays projects a 15% earnings jump this year and a 9% increase in 2012; however, the firm lowered its S&P 500 year-end price range to 1325 from 1450 as a result of continued uncertainty and slowing earnings growth. The drop in business confidence due to the debt ceiling debacle, U.S. debt downgrade and the overall market decline has not diminished corporate investments, Knapp noted.

“Economic uncertainty, along with the political struggles in Washington and Brussels in dealing with structural and cyclical public-sector debt, have resulted in equity market valuations both on an absolute and relative basis that we consider attractive,” Knapp wrote in a research note, according to the Dow Jones report. [Stock ETFs Rally Before Jobs Report]

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