After stocks fell two days in a row, the Dow Jones Industrial Average (DJINDICES:^DJI) and the broader S&P 500 (SNPINDEX:^GSPC) are up 0.55% and 0.45%, respectively, as of 10:10 a.m. EST.

Earnings: Mind the brakes
(NYSE:AA) kicked off the fourth-quarter earnings season with a moderately upbeat report after yesterday's market close. Earnings of $0.06 per share were in line with the consensus forecast, and the company said it expects global aluminum demand to advance 7% this year, up from 6% in 2012. Alcoa shares opened up 2.5% this morning. However, broader optimism regarding company earnings looks unwarranted.

The current forecast for 2013 calls for a 13.3% rise in the S&P 500's operating earnings (15.6% on the basis of "as reported" earnings). It's difficult to see how companies will achieve that with the economy expected to lumber along at a torpid 2% to 3% growth and S&P 500 profit margins near multiyear highs.

In that regard, the experience of 2011 was instructive. In December 2011, analysts were looking for 10.1% growth in both operating and as-reported earnings per share for the S&P 500. How did things turn out? If current estimates of fourth-quarter earnings hold up -- a generous assumption -- actual growth will come in at just 2.6% for operating EPS and a barely positive 0.2% for as-reported EPS. In fact, year-on-year growth in trailing-12-month operating earnings has been decelerating since the third quarter of 2010. In past cycles, a reversal typically has occurred only after growth has dipped into negative territory (i.e., contraction). There is scant evidence that we'll see a different pattern in 2013.

Alex Dumortier, CFA has no position in any stocks mentioned; you can follow him @longrunreturns. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.