BANK OF AMERICA CORPORATION 
It is still too early to get a proper view of the fourth quarter, with just seven percent of S&P names reporting results so far. But the combination of the global economic decline spreading through the market and the sharp decline in oil prices since June to below $50 a barrel is troubling investors.
That could keep the current sell off in stocks continuing for some time, especially if poor earnings reports failed to justify already-high valuations and instead pushed them higher.
"There's still a tremendous amount of uncertainty in corporate earnings and how the decline in the price of oil will affect them," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
Most of the 33 companies that have already issued reports have beaten earnings and revenue expectations, but they are topping forecasts that have been revised down sharply in recent weeks.
Wall Street still expects overall earnings of companies in the Standard & Poor's 500 stock index to rise 3.5 percent for the fourth quarter, but that figure has fallen from 4.2 percent since Jan. 1 and from the 11 percent consensus that prevailed on Oct. 1.
A bad earnings season could quickly make stocks seem more costly as the forward price/earnings ratio of the S&P on Monday stood at 16.2, already above its historical average of 15. Any deterioration to the earnings part of that equation could put downward pressure on share prices.
Notably, big banks are showing a slowdown in profits in the fourth quarter of 2014, joining energy companies which are expected to report a 21 percent plunge in earnings as oil has plunged 59 percent since June.
The weakness in energy earnings and shares could spread further in the U.S., weighing down corporate earnings. Other sectors expected to benefit, including industrials and consumer discretionary stocks, have yet to see any benefit from the fall in energy costs.
Thursday's disappointing retail sales release raised concern that consumers are not spending their savings on gasoline on other goods. U.S. retail sales recorded their largest decline in 11 months for December.
On top of the bleak retail news, a sharp fall in copper prices has generated worries that oil's decline is not isolated, and may even signal broader economic weakness. Prices of copper, a key industrial metal, fell 5.9 percent to their lowest level in more than half a decade.
"This just does not speak well for industrial demand for commodities in general," said Frank Lesh, futures analyst and broker at FuturePath Trading LLC in Chicago.
"What will demand look like if we're seeing everybody slow down? Just because (oil) gets cheap, it doesn't mean everybody's going to rush in and buy," said Lesh. "We're not sure what this sell-off (in oil) says about the world's economies."
Behind energy, the materials sector has the next worst fourth-quarter outlook with an earnings decline of 0.7 percent expected.
The financial sector is expected to see a 0.6 percent drop-off year-on-year. JPMorgan Chase, Bank of America and Citigroup Inc all reported lower-than expected earnings this week.
The strongest sector is expected to be healthcare with a 17.5 percent growth rate. Telecom and industrials are the only other sectors expected to post growth above 10 percent, after the entire S&P posted a 10.3 percent growth rate in the third quarter.
Energy investors are looking beyond the fourth quarter at a miserable 2015, with earnings expected to show a continued downward spiral with a first-quarter decline of 42.7 percent.
"I would expect the first quarter to probably turn out worse as far as energy goes," Lesh said.
(Reporting By Sinead Carew; Editing by Linda Stern and Alan Crosby)
By Sinead Carew
