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NEW YORK (AP) - Some of the nation's biggest, most successful companies have posted very good third-quarter earnings, yet their stocks have been punished for lackluster profit forecasts. And that has the major indexes whipsawing — a trend likely to continue in the week ahead.
Wall Street's focus is always on the future and the potential for strong profits. The problem with earnings reports is that, no matter how good they are, they're already well in the past. Corporate profit forecasts are far more important, especially amid economic uncertainty.
There's plenty of economic uncertainty weighing on investors. Growing evidence suggests the economy has weathered high energy prices, and could continue to adapt through the winter. A drop in crude oil prices to the $60-per-barrel level was also a positive sign. Yet members of the Federal Reserve's interest rate-setting committee spoke issued a barrage of inflation warnings last week, and intimated that the Fed won't be done raising rates any time soon.
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