EARNINGS forecasts for US companies are starting to feel the pain on Wall Street and in the broader economy as the odds of another recession rise.

Intense fear that global debt issues and stagnant growth cannot be resolved has pummelled market confidence in the past couple of months.

Earnings have been one of the market’s few positives, coming in strong despite economic woes.

But analysts now are toning down double-digit growth targets for the rest of this year and next on the heels of a record second quarter.

A distressing signal came from FedEx, the world’s number two package delivery company, which many on Wall Street look to as an economic bellwether.

FedEx lowered its full-year profit outlook last week, citing high fuel costs and a struggling global economy.

Since 1 July, the Standard & Poor’s 500 Index has lost 15 per cent. Forecasts for third-quarter earnings for the S&P 500 companies have slipped to 13.7 per cent growth from 17 per cent, according to data. But many strategists say those estimates are still too high.

For next year, S&P 500 earnings-per-share estimates are eyeing $112, which would be a record.

Over the last few weeks, analysts have cut earnings estimates for S&P 500 companies across all sectors except technology. Financials are among the hardest hit.

Negative guidance from companies is also on the rise, outweighing positive guidance by a ratio of more than two-to-one.