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Non-Tech : ACCO: 800America.com, Inc
ACCO 3.445+0.3%3:59 PM EST
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From: LTK0071/27/2007 4:10:44 PM
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Street.com<<One big reason for the long faces (and short positions) is this: Among S&P 500 companies, tech earnings grew by a paltry 2% in the December quarter,(edit:MANY tech analysts were predicting much higher!--max) while overall earnings by index companies grew by just under 10% according to Thomson Financial. A final accounting of the quarter's strength is still a week or so away; just 39% of the S&P 500 has phoned home, and a bit more than half of the tech companies have reported.

But what we've seen so far is making a lot of investors -- already fretting over inflation -- nervous.

Thomson also reports that of the 39 tech companies that have posted earnings, about two-thirds have exceeded expectations and only a few more than 10% have missed. On the surface, that looks like a bullish performance. But consider this: The growth in S&P 500 tech earnings was just a fraction of what it was at this time last year, when profits were up a solid 18% year over year.

So what we have here is a collective lowering of expectations. And that's not good news, says Richard Williams, chief software analyst for ICAP. "The Street is following consensus so closely that it sometimes misses the larger picture. What we see is the deceleration of the rate of growth of many of our software companies, and that's more important in the intermediate and the long term than making or missing guidance." >>
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