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As if the past week weren't fun enough, we've now got fourth-quarter earnings to look forward to.

Five companies in the

S&P 500

(SPX) will report earnings this week, highlighted by

Alcoa

(AA) - Get Alcoa Corporation Report

on Tuesday, but then all hell will break lose the week starting Jan. 14 as one penitent after another steps up into Wall Street's public confession booth.

At the moment, according to Thomson Financial, the estimated aggregate growth rate for the S&P 500 companies in the fourth quarter of last year is at a stunning -9.5%.

If there's one reason why the market has tanked recently, it is this: On Oct. 1, the estimated growth rate for the fourth quarter was fantasized at +11.5%. Unless a miracle happens -- and to be honest, I'd be short the Miracle Index, if there were one -- these will be the first back-to-back quarters of negative earnings growth for the S&P since the fourth quarter of 2001 and the first quarter of 2002.

Of course, most of the downward pressure on earnings has come from financial stocks. Thomson reports that estimates for diversified financial companies suggest their earnings will be down by $14.3 billion, investment banks and brokerages will lose $12.9 billion and mortgage lenders will be down $6.3 billion.

These losses will be offset somewhat by expectations for 22% growth in the technology stocks in the index.

Microsoft

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is expected to be the biggest gainer, but when all the bodies are counted, this is going to be one seriously stiff earnings season.

As reports start filtering in, you need to keep in mind that 2007 itself was not nearly as strong as it looked on paper. In the final tallies, the S&P 500 advanced by 3.6%, and the S&P Small-Cap Index (SML) and the Nasdaq 100 (NDX) advanced by 19.2%. Yet most of both indices' gains were concentrated in a small handful of stocks. Indeed, 2007 turned out to be a winner-take-all market. Here's what I mean:

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There were just a few groups where we actually saw uniformity. They included the steels, specialty chemicals, fertilizer makers, agricultural equipment makers, marine shippers and oilfield services. All told, the lesson for active traders was that in a market environment such as this, there was just no point to trying to buy laggards with the hope that they will catch up with leaders. You needed to accept what the market was offering, and just focus on fundamentally sound, well-priced leaders and not try to get too tricky with the also-rans.

As we go into 2008, we will continue to be aware of that differential, but every turn of the cycle is different. Right now, the few groups left standing in the past week have been utilities, natural gas producers and the entire farm complex.

Today I'll talk about

Questar

(STR)

, a gas utility that should continue to work, and then later in the week I'll discuss a farm equipment maker that has gone against the grain, so to speak, to find success.

I'm not going to lie to you: Questar is a pretty boring company. It explores, produces, distributes and stores natural gas through various business units spread throughout the Rocky Mountains. The S&P Gas Utilities Index rose 13% in 2007, handily beating the broad market, while Questar was up 31%. Most of the gains for both came from January to July -- and then unlike the rest of the market, they stabilized while everything else tanked.

Questar's exploration and production division has been its most successful business unit. Operating in Wyoming, Utah, Colorado, Oklahoma, Texas and Louisiana, it has an estimated 1.63 billion cubic feet equivalent of proved reserves. A healthy capital expenditure budget continues to push the figure higher.

The distribution arm of the company, Questar Gas, delivers natural gas as a utility to commercial and residential customers in Utah, southwestern Wyoming and a small portion of southeastern Idaho. It also provides sales and transportation services to industrial customers. The integrated strategy helps it keep costs down and supply steady; the utility can satisfy about 45% of sales needs with gas produced in-house.

STR's transportation division operates 2,503 miles of interstate pipelines and underground storage services in Utah, Wyoming and Colorado. With a total daily capacity of 3,442 thousand dekatherms, the unit's core holding is the Southern Trails Pipeline -- a 488-mile line that extends from the Blanco hub in the San Juan Basin to just inside California. This operation is less sensitive to commodity price fluctuations and helps fund the company's modest dividend payouts.

Third-quarter earnings came in higher than expected and gave STR shares a bit of momentum going into the fourth quarter. Though revenue is expected to decrease in 2008 on lower oil and natural gas prices, operating margins are projected to increase to around 30% from 26% in 2007. The company is scheduled to release fourth-quarter earnings in the second week of February.

Consensus expectations are for earnings of 71 cents per share, but I believe Questar will surprise to the upside, showing more like 75 cents. If current earnings trends keep up, the stock could slowly creep toward $64 this time next year, or 18% higher than the current quote.

At the time of publication, Markman had no positions in stocks mentioned, although positions may change at any time.

Jon D. Markman is editor of the independent investment newsletter

Strategic Advantage. He also writes a regular column for

MSN Money. While Markman cannot provide personalized investment advice or recommendations, he appreciates your feedback;

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