时事资讯:公司收入不增股市能否上涨？_时事

时事资讯:公司收入不增股市能否上涨？

Heading into September, a notoriously bad month for stocks, the Dow Jones Industrial Average is up 8.75% for the year at 9544.20. That is just off from the best levels seen since early last November. Though trading volume has been light in recent days, the market has been able to hold on to a rally that sent the Dow industrials up 12% since mid-July and up 45.8% from the March 9 low.

According to Goldman Sachs Group Inc., 46% of companies beat Wall Street's earnings expectations by a wide margin, but only 23% significantly bettered revenue forecasts. Sales among companies in the Standard Poor's 500 stock index fell 16% in the second quarter from a year earlier, following a 14% decline in the first quarter.

David Kostin, an equity strategist at Goldman, points to a decline in a key line item on corporate income statements known as 'selling, general and administrative expenses' otherwise known as SGA. Included in SGA are salaries and costs of doing business, such as travel or advertising.

SGA plunged 6.4% in the second quarter from the year-earlier period, Goldman says. In contrast, in the last recession, SGA fell just 0.2% and in 1991, it dropped 4.1%.

'There's been an unprecedented decline in overhead costs,' Mr. Kostin says.

A big part of the challenge for generating an upturn in sales is that consumers, whose spending has driven roughly 70% of economic activity in recent years, are hamstrung by a bleak job market. That was evidenced Friday by a weak reading on consumer confidence from the University of Michigan and government data showing incomes were flat in July.