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Corporate growth in the fourth quarter will prove significantly less than the third quarter, according to Zacks Investment Research.

On average, members of the S&P 500 index are expected to report year-over-year earnings growth of just 4.6 per cent, down from 13.4 per cent growth in the third quarter. Revenue growth is expected to slow to 3.4 per cent, down from 10.3 per cent.

Lower forecasts may be reflective of a looming recession, or they may just provide greater scope for positive upside.

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Looking ahead to 2012, share profit for the S&P 500 is expected to top the $100 "per share" level for the first time, at $104.87. That compares to $56.80 for 2009, $83.18 for 2010, and $95.39 for 2011, according to the report, carried by the Pragmatic Capitalist.

"In an environment where the 10-year T-note is yielding 2.05 per cent, a P/E of 14.8x based on 2010 and 12.9x based on 2011 earnings looks attractive. The P/E based on 2012 earnings is just 11.8x," writes Dirk Van Dijk of Zacks.

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