Earnings season is wrapping up, and second-quarter revenue and profits haven't seriously rattled nerves. Forecasts for the third quarter, however, have fueled fears of a slowing economy.

With about 85 percent of the companies on the broad Standard & Poor's 500 stock index reporting, 51 percent have exceeded net-profit expectations, while 40 percent have beaten on revenue, according to CNBC.

Looking forward, 50 percent of those companies have cut third-quarter estimates, while only 21 percent have raised. That's prompting analysts to slash their forecasts for broader S&P 1500 companies for the quarter on fears the economy is cooling.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

"We think the downward revision cycle has further room to run, and management guidance has similarly gotten more cautious with twice as many companies now guiding down as up," Savita Subramanian, equity and quant strategist at Bank of America Merrill Lynch, said in a research note, CNBC added.

A slowdown in Europe coupled with a looming "fiscal cliff" are scaring businesses away from investing in new growth-oriented projects.

At the end of the year, tax breaks are scheduled to expire while automatic cuts to government spending kick in, a combination known as a fiscal cliff that could send the country back into recession next year if left unchecked by Congress.

"The economy is in a slow-growth mode. The stock market is, I think, maybe at best correctly priced for that kind of environment," David Resler, chief economist at Nomura Securities in New York, told CNBC"

"We have plenty of downside risks that I don't think are fully priced into the market."

Stocks have risen lately on sentiment the Federal Reserve will intervene in the economy with monetary stimulus tools to stave off further decline.

On such tool, known as quantitative easing, sees the Fed buy bonds such as Treasury holdings or mortgage-backed securities from banks, pumping the economy full of liquidity and holding down interest rates in the process that makes equities an attractive investment.

Fed officials have reiterated that such intervention remains up for consideration.

"The Fed's basic message is, 'Not to worry, we will be there if the economic data does not improve,'" Quincy Krosby, a market strategist at Prudential Financial, according to USA Today.

"The problems in Europe have not gone away, but we are in remission at the moment in terms of negative headlines."

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.