Profits: Ouch. It's Starting To Hurt

U.S. third-quarter earnings are off 7% from last year's level

So, how bad was it? Not apocalyptic, but Wall Street's anxiety over third-quarter results was well founded. BUSINESS WEEK's flash earnings report, based on announced profits of 130 companies, is a sign of a slowing economy: Profits are down 7% from a year ago, on an anemic 2% sales increase. Worse, the weakness that emerged in the second quarter has now spread beyond manufacturing to service companies--whose earnings had risen 20% in the second quarter, only to drop 23% in the third.

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