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Halftime Report: Is Fear Of A Weak 3Q Overblown?

None of which means that corporate America is in the clear. There's a big difference between less terrible and good.

Strong performance by financial companies is boosting the average earnings growth. Many banks are benefiting from a temporary boom in mortgage refinancing. That can't last forever. Banks acknowledge that the number of qualified borrowers is already dwindling.

Companies that depend on global demand, like metals and energy companies, are reporting the weakest results.

"We're getting confirmation that the world is slowing through these earnings," says Stovall, who believes that U.S. companies can continue to grow modestly even in a period of weak economic growth.

Revenue will remain under pressure if current economic trends continue. The U.S. economy is growing at a sluggish 2 percent annual rate, the government said Friday. If growth remains slow, revenue gains will remain weak, analysts say.

The global economic slowdown, meanwhile, is threatening companies that rely on overseas markets. Businesses had relied on international sales to offset weak U.S. consumer demand. Europe's recessions and China's pullback are making that more difficult.

Last year, S&P 500 companies got 11.1 percent of their revenue from sales to European countries, according to data compiled by Howard Silverblatt, senior index analyst with S&P Dow Jones Indices.

The problem is not confined to Europe. In all, companies generated 46.1 percent of their revenue from sales outside the U.S. The data include 252 companies that include such information in their financial disclosures.

It's difficult to say definitively whether U.S. companies that sell only domestically are doing better than those that operate overseas. But analysts and companies say anecdotally that it's harder to make a sale in recession-wracked Europe than in the slow-growth U.S.

Another challenge for multinationals: the almighty dollar. As it strengthens against other currencies, sales overseas translate into fewer dollars of revenue back home.

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