Lackluster corporate profits and revenue in third-quarter earnings reports are unsettling investors and pushing equity ETFs lower.
“Cautious guidance, along with the election and the fallout from the fiscal cliff, has put investors on edge. As a result, many may be willing to end the year early and accept a potential low double-digit gain,” according to Standard & Poor’s, which points to “headline-grabbing third-quarter earnings disappointments” by high profile S&P 500 components.
SPDR S&P 500 (NYSEArca: SPY) is up about 14% year to date although the blue-chip stock ETF has slumped a bit in October on disappointing third-quarter earnings reports.
Additionally, U.S. companies are announcing guidance below Wall Street forecasts.
“Halfway through the third-quarter earnings season, one thing is becoming clear: the fourth quarter is likely to be gloomy,” MarketWatch reports. About 90% of firms are guiding under Wall Street estimates.