A flagging world economy took a toll on much of Corporate America in the third quarter, leading the likes of eBay Inc, American Express, IBM and Textron Inc to miss Wall Street's sales targets or warn that spending was slowing into the holidays.
Those misses sparked concerns among investors that corporate America's year-long streak of profit growth could be nearing an end as CEOs run out of costs to cut and customers are increasingly wary about spending.
A major worry is the risk of the year-end fiscal cliff - $600 billion of spending cuts and higher taxes that could take effect at the end of the year if lawmakers in Washington fail to agree on a plan to shrink the federal deficit.
A majority - 54.3 per cent - of the 70 companies in the widely watched Standard & Poor's 500 Index that have reported results so far have missed analysts' revenue forecasts, according to Thomson Reuters I/B/E/S.
The list of companies' reasons for weak performance has expanded, with some citing a decline in demand in the United States - until recently a more reliable source of growth - as well as in Europe, which is mired in a debt crisis.
American Express warned that its cardmembers' spending was starting to wane. After nine quarters of double-digit growth, spending among its mostly affluent customer base grew just 8 per cent in the last quarter.
The online marketplace eBay beat estimates, but analysts said the magnitude was unimpressive and the holiday outlook cautious as price competition increases among retailers.
International Business Machines Corp, the world's largest technology services company, missed analysts' sales forecasts for a fifth consecutive time with a 5 per cent drop in the third quarter, as corporate customers in the United States and Canada cut their spending on equipment and services.
"When I look at our skew of business in the quarter, through the first two months, our revenue was fairly consistent with our second-quarter performance," IBM's Chief Financial Officer Mark Loughridge told investors after the company reported earnings late Tuesday. "The third month of the quarter was more challenging."
Chipmaker Intel Corp also said lower corporate spending hurt its revenue, which was down 5 per cent for the quarter. It set a fourth-quarter sales target that was below analysts' forecasts.
While troubles in the tech sector reflect in part a lack of corporate confidence, with companies holding back on committing to major new investments, soft drink makers PepsiCo and Coca-Cola Co also reported weaker-than-expected revenue.
PepsiCo said on Wednesday that its sales in the Americas were down about 3 per cent in the quarter, which partly reflected its decision to stop selling some juices and bottled water packages after "a hell of a price war," CEO Indra Nooyi said.
The company, which also makes Frito-Lay snacks and Tropicana orange juice, also noted that the strong dollar hurt its results by decreasing the value of sales made outside the United States.
Many major US companies with international operations have cited the strong dollar as a drag on growth this year.
Drugmaker Abbott Laboratories also reported weaker-than-expected revenue after its sales slipped 0.4 per cent to $9.77 billion in the quarter.
No. 2 oilfield services company Halliburton Co said slowing US drilling took a toll on its profit in the quarter.