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Earnings season used to be such a nice time. Families would cook up turkeys and sweet potatoes and give each other presents to celebrate


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exceeding analyst expectations by a penny a share.

Not anymore.

The quarterly earnings party has turned vicious, forcing investors to navigate turbulent waters like never before. Heavy preannouncements from stalwarts like


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set a nasty tone that was compounded when market leaders such as


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failed to impress skittish investors.

Even yesterday's "good" news from

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Sun Microsystems

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and Microsoft was met by horrible news from


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. Sun, after romping in 1999 style, quickly fell back to record a meager gain. Apple is looking more like Scrapple, and not as tasty.

Most telling, investors once eager to uncover a mite of good news now savage companies for not doing "enough." That shift illustrates how the earnings season mood has changed. Bad news dominates and good news is crushed under a stampede of bears.

"The bull market mentality is gone," says Max Ansbacher, head of

Ansbacher Investment Management

in New York. "IBM had a good net but its revenues were bad. In another time, it wouldn't have mattered. ... People will seize on any excuse

to sell."

But it's more than mood. Some of the fundamentals have shifted. Oil prices are higher, Europe is struggling and rates aren't the cooperative force they once were.

Michael Holland, who runs the

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Holland Balanced Fund, says that the slow unraveling of the bull case won't change anytime soon. "We won't be paying $10 a gallon for oil any time soon, and we're not going to have the


reduce rates," he says.

From the trenches, fundamental concerns about future growth are mixing with the negative sentiment in volatile ways. On Wednesday, RealNetworks said it met its 4-cents-a-share analyst expectations for the third quarter but expected to lose $3 million in ad revenue during the fourth quarter. That knocked more than 31% off the stock, which closed at $14.88. Following Tuesday's close, IBM reported earnings similarly in line with Wall Street estimates, but revenue rose just 3%, near the bottom of analysts' expectations. It fell 15.5% Wednesday, and landed at $95.44.

Bob Olstein, who runs the

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Olstein Financial Alert fund, says investor skepticism is what has made this round of earnings more painful than in the past year. "People are looking between the numbers now. It doesn't matter if a company beats estimates, because investors are looking beyond it. They're looking at cash reserves and other things. They're not buying the fake growth."

Barry Colvin, the chief operating office at hedge fund consultant

Tremont Advisers

, says money managers had been pointing to concerns in tech stocks that essentially had been ignored through most of 1999. "They were talking about sales growth, revenue growth, profit margins and highlighting gimmicks like using investment income to boost returns," Colvin says. "What they were pointing out is coming to bear."

Colvin says that in the wake of the tech-stock slide of early April, the pressure on professional money managers to stay fully invested has waned. "There's a change in psychology approaching earnings season now," Colvin says. "In 1999, the glass was half full. This year, they're approaching it like it's half empty."

All agree that the market is undergoing a transitional period, reflected clearly in the reaction to earnings.

"If a company beats the estimates, who cares? Now people are asking if the valuation is right," Olstein says, adding that there still are investors trying to play by the rules of last year. "The music's changed, but there are some guys doing the same dance."