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A Bloomberg review of the S&P 500 stocks shows that the fourth quarter of 2008 will probably be the sixth quarter of declining earnings. According to the news service, "Fourth-quarter profit at companies in the Standard & Poor’s 500 Index may have dropped an average of 11.9 percent from a year earlier."

That may be a useful look at the past, but the movement of the stock market is going to be based on expectations for the first quarter of 2009.

It is unlikely that profits at retail, financial, and automotive shares will recover. That leaves energy, tech, media, and defense earnings to help the market higher. Numbers at places like Citigroup (C), AIG (AIG), and Fannie Mae (FNM) are not going to get better

Energy numbers are going to be dependent to a large extent on oil and gas prices. If geopolitical conflicts move crude higher or OPEC makes more sharp productions cuts, earnings could improve, but those things can’t be counted on. Don’t look for better figures from Exxon Mobil (XOM) or Valero (VLO)

Technology earnings depend on a recovery in consumer spending and an upswing in business IT investments. With unemployment growing and credit hard to come by, that is not likely. Microsoft (MSFT), Cisco (CSCO), Intel (INTC), Google (GOOG), and Apple (AAPL) are in for rough times.

Media earnings will continue to be hampered by falling advertising demand. Don’t watch for better earnings out of Time Warner (TWX), CBS (CBS), of Viacom (VIA).

That leave defense. Military conflicts overseas could help here, but the new Administration and Congress do not appear to be the hawkish types.

In other words, look for several more quarters of falling S&P 500 earnings.

Douglas A. McIntyre