Goldman Sachs cut S&P 500 index's profit forecasts

David Kostin, who leads Goldman's New York-based portfolio strategy team, cut his 2008 S&P 500 profit forecast by 9.7 percent to $65 and his 2009 estimate by 9.3 percent to $68, citing slower U.S. economic growth and larger losses for banks and brokerages.

"The reduction incorporates a weaker economic outlook than previously assumed, greater estimated losses for the financial sector, and weak third-quarter earnings results and forward guidance," Kostin wrote in a note to clients.

$700 billion in credit losses and writedowns at financial firms worldwide is hurting the outlook for corporate profits. Companies in the U.S. stock benchmark are poised for the fifth consecutive quarter of falling earnings, the longest streak since the 2001 recession.

Sources :

Bloomberg: Goldman Cuts S&P 500 Profit Forecast, Citing Economic Slowdown, November 7, 2008 12:34 EST

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