Wall Street sees trouble on the horizon for the stock market if earnings don't catch up soon with stock valuations, according to a MarketWatch analysis.

With most Standard & Poor's 500 companies now having reported second-quarter earnings, earnings growth appears headed for a 1.7 percent gain, while the index itself is up 6 percent thus far in the third quarter.

However, MarketWatch noted that when big gains from financial firms are factored out, the second-quarter growth rate actually becomes a 3.4 percent decline.

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"That sort of lopsidedness stokes concerns," MarketWatch noted.

Brad McMillan, chief investment officer at Commonwealth Financial, said stock prices are too expensive at current levels.

Tobias Levkovich, chief U.S. equity strategist at Citi Research, told MarketWatch the markets' trailing price-earnings ratio for the last four quarters has risen to 16.02, a fairly lofty level that undercuts the prospect for 12-month returns according to his data that goes back to 1940.

Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said stocks' profit margins are barely below their record of 9.6 percent, which was last seen in 2006.

"If you look at profits as a percent of [gross domestic product], when they get this high, they drift down," Silverblatt told MarketWatch.

However, financial observer and author Barry Ritholtz, author of "The Big Picture" blog, is decidedly less pessimistic about stocks.

"We interrupt the upcoming economic apocalypse and market collapse for this surprising message," he wrote. "Earnings are being revised higher, as are revenues as well."

Ritholtz cited a new Merrill Lynch report estimating that earnings expectations for the second quarter as the season winds down are actually 1.3 percent higher now than at the start of the earnings season.

He said the second-quarter results show that "sales growth is no longer elusive."

"Perhaps the most interesting data point in the report is that the 2.7 percent sales growth ex-Financials are likely to be up 1.7 percent. In other words, revenues are finally rising."

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