Analysts think profit growth slowed for U.S. multinational companies from October through December because of weaker demand overseas. Europe is on the brink of recession, and China's explosive economy is cooling.

Quarterly profits for S&P 500 companies will probably only grow at half the rate of the previous three quarters, said Sam Stovall, chief equity strategist at S&P's Capital IQ. The companies generate about half their revenue overseas, he said.

The U.S. is in a "half-speed recovery, and that probably isn't enough to offset the weakness in Europe and Asia," Stovall said.

Many analysts expect materials companies such as Alcoa to suffer as developing nations expand more slowly. Government-funded construction booms had driven up prices for metals and other basic products.

"China, India, Latin America â¿¿ that's where those companies have been really driving sales in the last few quarters," said John Butters, senior earnings analyst at FactSet.

He said investors should pay close attention to what companies say about their overseas sales for clues to their future performance.

Analysts with S&P Capital IQ took a brighter view of the materials sector. They said in a note to clients that rising prices for steel, gases and chemicals will help offset declining global demand.

Another reason to expect slower profit growth: The results for the last three months of 2011 will be compared with the last three months of 2010, which are not as easy to improve on as results from earlier in 2010.

In early 2010, the U.S. was just emerging from its deepest recession in decades. Changes in the economy since late 2010 have been less dramatic, so the comparisons are more challenging, Butters said.

European markets closed lower Monday. French and German leaders met to craft the regional fiscal treaty that they agreed to pursue last year. It was their first crisis summit of the year.

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