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A steady decline in the number of people applying for weekly unemployment benefits is the latest signal that the economy has strengthened and businesses may be poised to step up hiring.

Applications fell last week fell to a seasonally adjusted 381,000, the Labor Department said Thursday. That’s the lowest level since late February.

And a four-week average for applications, which smooths week-to-week fluctuations, fell for the ninth time in 11 weeks to an eight-month low.

The downward trend in unemployment benefit applications bolsters the view that the economy has improved from its spring slump, when many feared another recession was likely. Consumer confidence is up, retailers reported a strong start to the holiday shopping season and the unemployment rate fell last month to its lowest point in two and a half years.

“There have been numerous indications that the labor market is healing and today’s jobless claims report only reinforces that view,” Dan Greenhaus, chief global strategist at BTIG, a trading firm.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the drop in unemployment benefit claims reflects relief among businesses that consumer demand didn’t plunge this fall as some had feared.

“We expect claims to head slowly downwards for the foreseeable future, and in due course payroll growth will accelerate,” Shepherdson said in a note to clients.

Applications that drop below 375,000 _ consistently _ tend to correlate with a steady decline in the unemployment rate.

The unemployment rate fell to 8.6 percent in November, the government said last week, down from 9 percent the previous month. Still, the rate dropped last month in part because more people gave up looking for work. Once the unemployed stop looking for jobs and drop out of the work force, they are no longer counted as unemployed.

Employers added a net total of 120,000 jobs last month. The economy has generated 100,000 or more jobs five months in a row _ the first time that has happened since April 2006 no faxing payday loans.

Many economists expect growth to accelerate in the final three months of the year, to about a 3 percent annual rate. That would be an improvement from 2 percent growth in the July-September period.

But the U.S. economy is vulnerable to shocks from overseas. European leaders are struggling to contain a two-year old debt crisis and the 17 nations that use the euro may already be in recession, economists say.

That could slow U.S. exports and cut into overseas profits earned by U.S. multinationals. Even worse, the crisis could force European banks to cut back on lending and U.S. banks to follow suit, leading to a credit crunch. Most economists are penciling in slower U.S. growth next year, partly because of Europe’s slowdown.

Fewer people are receiving unemployment benefits, and the number of people on extended benefits also fell. Some of that decline is because those out of work found jobs. But economists think most have likely used up all their benefits.

The number of people receiving benefits fell by 174,000 to 3.58 million. But that doesn’t include several million people receiving aid under extended programs put in place during the recession. All told, 6.6 million people received unemployment aid in the week ending Nov. 19, the latest data available. That’s about 400,000 fewer than the previous week.

Congress is debating whether to continue the extended benefit program, which expires at the end of this year. The program provides up to 99 weeks of benefits in states with high unemployment rates. If the program isn’t continued, the Labor Department estimates that about 1.8 million people could lose benefits by early February.

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Australia’s central bank cut its benchmark interest rate by a quarter percentage point on Tuesday, the second such move in as many months as concern mounts over the fragile global economy.

The Reserve Bank of Australia said its decision to lower the rate to 4.25 percent comes amid uncertainty over the European debt crisis, and concern that global economic conditions could worsen.

“Financial markets have experienced considerable turbulence, and financing conditions have become much more difficult, especially in Europe,” Reserve Bank Governor Glenn Stevens said in a statement. “This, together with precautionary behavior by firms and households, means that the likelihood of a further material slowing in global growth has increased.”

Economists were split on what the bank would do, after it cut the cash rate by a quarter percentage point in November. Tuesday’s decision marked the first time the bank has cut rates in consecutive months since Dec. 2008, the height of the global financial crisis.

The move will provide a savings of an extra 50 Australian dollars ($51) a month on a AU$300,000 mortgage, Treasurer Wayne Swan said.

“Christmas is a time when family budgets are stretched, so I’m certain it will be welcome,” Swan told reporters.

The treasurer said the country’s economy remained strong, but said there are “serious risks” arising from Europe’s debt woes. European Union leaders will hold a summit later this week to discuss a plan to resolve the crisis.

“There is a lot riding on what is happening in Europe as we go through the rest of this week,” Swan said. “All of us hope and pray that the Europeans get their act together.”

Australia’s economy remained strong throughout the global financial crisis thanks to a mining boom largely fueled by China’s demand for iron ore, coal and natural gas.

Craig James, chief economist with the Commonwealth Bank of Australia, said the Reserve Bank will probably cut the rate by another quarter percentage point when it meets again in February. Should the European crisis worsen dramatically, he said, the bank may issue an even steeper cut of half a percentage point.

“In the global financial crisis, they were quite aggressive with cutting interest rates,” James said. “This time around, they’re not taking any chances.”

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Tens of thousands of Egyptians rallied Friday in Cairo’s Tahrir square with Islamists in the forefront to protest against what they say are attempts by the country’s military rulers to designate themselves as the guardians of a new Egypt. It was one of the largest rallies in Egypt in recent months.

Most rallies in Tahrir have been led by liberal- or left-leaning groups. But Friday’s rally was dominated by the country’s most organized political group, the Muslim Brotherhood, which has rarely come out in full force since the protests that forced President Hosni Mubarak to step down in February.

The Brotherhood had until recently avoided confrontation with the ruling Supreme Council of the Armed Forces, but now warns of escalating its protest campaign if plans to give permanent political powers to the military are not scrapped.

“The army has no role in ruling people. Its only job is to protect the country. We want civilian rule chosen through democracy,” said Hani Hegazi, a 28-year old Brotherhood member who traveled by bus to Tahrir from the Delta province of el-Beheira.

Banners read: “Down with military rule. Egypt our country is not a military camp.” Some demonstrators flew the Egyptian flag, while others including ultraconservative Salafis waved a banner declaring Islam’s holy book, the Quran, to be “our constitution.”

The rally was called to protest a document floated by the government which declares the military the guardian of “constitutional legitimacy,” suggesting the armed forces could have the final word on major policies even after a new president is elected. The document, which includes guiding principles for Egypt’s new constitution, also introduces clauses that would shield it from civilian oversight.

Most of Egypt’s pro-democracy groups object to the document, calling it an attempt to perpetuate military rule past the post-Mubarak transitional period which is supposed to end with the election of a new parliament and a new president.

In addition to the Brotherhood, Salafis, left- and liberal-leaning groups such as the April 6 movement and other youth revolutionary alliances joined the rally, demanding a timetable for the end of military rule, which began in February.

They have called for marches from mosques around Egypt to major squares, dubbing it the “Friday of the Single Demand” _ that demand being a clear date for the transfer of power to civilian rule. Many groups have planned to hold an open ended sit-in until a date has been set.

The Brotherhood says the document reinforces “dictatorship.”

“It contains articles that rob the people of their sovereignty and reinforces dictatorship. It constitutes a coup against the principles and goals of the January 25 revolution,” the group said in a statement issued Wednesday. Last-minute negotiations between the government and the Brotherhood failed to stave off their participation in the rally, or scrap the document payday loans lenders.

The show of force comes 10 days before the country’s first parliamentary elections since Mubarak stepped down, when a Brotherhood-affiliated political party is expected to fare well.

Anger against the Supreme Council has been building up over their management of the transition period. Many complain that the generals are recreating the Mubarak regime by cracking down on opponents, by refusing to order a thorough reform of the security services, and by monopolizing decision making. Islamists and liberals alike now express fear that the military council wants to hold on to power, a claim denied by the generals.

The military council had promised to transfer power to an elected civilian government within six months of Mubarak’s ouster. But according to a vague timetable in place, it may not be until early 2013 that a president is elected. Only the dates for the parliamentary elections, which are due to begin in ten days and which will drag into March, are yet known.

Walid Farouk, 32, who wore the heavy beard and traditional robe of the ultraconservative Salafi trend, said that Egypt had seen nothing good from military rule since the army first took power in 1952.

“All of us are scared that the army could try to hold on to power,” he said. “It is time for a civilian government.”

The writing of Egypt’s constitution has been a divisive issue, and details of who will write it and what it contains are at the heart of recent rallies.

Some liberals have supported the idea of writing guiding principles for the constitution, fearing that a parliament controlled by Islamists would insert religious principles into the document.

Even now, some liberals remain opposed to the Friday rally, saying a document is necessary to detail how members of the assembly are to be chosen, and controversial clauses can be negotiated.

But many others have come to distrust the military’s Supreme Council at least as much they distrust the Islamists.

At Friday’s rally, protesters are also expected to celebrate the birthday of one of the most prominent revolutionary to be jailed by the military prosecutor. Alaa Abdel-Fattah, a famous blogger and activist, was detained late last months for refusing to answer to the military prosecution on his alleged role in sectarian violence that left 27, mostly Christians, dead. He turned 30 on Friday.

Many hold the military responsible for the violence, and see Abdel-Fattah’s detention as an attempt to find a scapegoat and discredit activists.

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Warren Buffett said Monday that his company has spent $10.7 billion to buy more than 5 percent of IBM’s stock this year, a surprising move by the billionaire investor who has long shied away from investing in high technology companies.

Berkshire Hathaway also revealed several other new investments made during the turmoil of the third quarter. Besides the new IBM investment, Berkshire added much smaller stakes in Intel Corp., DirecTV, General Dynamics Corp. and CVS Caremark Corp.

Most of the details emerged from the quarterly update Berkshire filed with regulators on its $59 billion U.S. stock portfolio. Buffett disclosed some details in interviews earlier in the day.

Monday’s filing doesn’t offer a full picture of Berkshire’s holdings, however, because the Securities and Exchange Commission allowed the Omaha-based company to keep some of its investments confidential.

Buffett has long refused to invest in high-tech companies because he has said it’s too difficult to predict which technology businesses will prosper in the long run.

But he said he recently realized his view of IBM was wrong based on what he read in the company’s annual reports and what he learned by talking to information-technology departments at Berkshire subsidiaries. He said he should have realized years sooner that hardware is no longer the heart of IBM’s business.

“Now they’re very much a services company, and they’re very intertwined with their customers,” Buffett said. And he said IBM’s customers are reluctant to change once they start working with IBM.

So Berkshire has bought about 64 million shares since March, or about 5.5 percent of IBM. Buffett says he believes IBM has a sound plan for the future.

Andy Kilpatrick, the stockbroker-author of “Of Permanent Value, the Story of Warren Buffett,” said it’s surprising to see Buffett invest in a high-tech company, but the investment appears to be an example of Buffett spotting something in plain sight that he had previously overlooked.

“I don’t think it moves things very far from what he’s always done,” Kilpatrick said.

IBM joins several other American business icons in Berkshire’s stock portfolio. Buffett’s company already holds stakes in Coca-Cola Co., American Express Co., Wells Fargo & Co., among others.

IBM officials declined to comment Monday on Buffett’s investment.

International Business Machines Corp., which marked its 100-year anniversary in June, has proven resilient even in a downturn because of hard decisions it made in the 1990s, when it tapped an outsider as CEO to help with a turnaround.

At the time, IBM was slipping with the rise of cheap microprocessors and rapid changes in the industry. Although it helped make the personal computer a mainstream product, it quickly found itself outmatched in a market it helped create. PCs also began to perform many of the functions of mainframes computer, throwing IBM’s main moneymaking business into disarray.

The company decided then to focus on the high-margin areas of software and technology services and move away from computer hardware. That intensified with IBM’s $3.5 billion purchase of PricewaterhouseCoopers’ consulting business in 2002 and the sale of its PC business to Lenovo for $1.75 billion in 2005. Today, IBM is the world’s biggest technology services provider no fax pay day loan.

The shift is important because it has allowed IBM to ride two recessions. When times are tough, businesses pay IBM to help them find ways to cut costs and handle technology chores that would be more expensive to perform in-house.

IBM’s stock has more than doubled since the depth of the recession in 2008. IBM shares gained as much as $2.46 Monday to trade near its 52-week high of $190.53 before slipping to close at $187.35, down 3 cents.

Buffett said Berkshire paid an average of about $170 per share for the IBM stock.

IBM executives insist the company’s focus on long-term contracts insulates it from economic swings. The company has said it is ahead of its own aggressive forecasts. IBM has disclosed a goal of hitting $20 per share in adjusted earnings by 2015, a rare example of a long-term earnings target made public by a major company. IBM, which is based in Armonk, N.Y., says it plans to continue growing its software business and invest about $20 billion in acquisitions from 2011 to 2015.

The third-quarter report filed Monday doesn’t include all of Berkshire’s new IBM stake because Buffett said some of the shares were bought in the fourth quarter.

A couple of the other new investments revealed Monday are tech companies. At the end of September, Berkshire held 9.3 million Intel shares, 4.2 million DirecTV shares, 3.1 million General Dynamics shares and 5.7 million CVS Caremark shares.

But those other new investments, besides IBM, were worth less than $200 million at the end of September. That dollar figure suggests those investments were made by Berkshire’s new investment manager Todd Combs, who manages between $1 billion and $3 billion.

It’s not clear who picked the investments because the filing doesn’t differentiate between investments Berkshire makes, investments any of roughly 80 subsidiaries make, or investments made by Buffett himself.

Besides the new investments, Berkshire also reported changes in some of its other holdings, including:

_ Increasing its sizeable stake in Wells Fargo to 361.4 million shares from 352.3 million in June.

_ Reducing its holdings of Kraft Foods to 89.7 million shares from 99.5 million.

_ Boosting its Dollar General stake to 4.5 million shares from 1.5 million.

_ Increasing its stake in insurer Torchmark Corp. to 4.2 million shares from 2.8 million.

Berkshire’s investments are closely watched in the market because of Buffett’s successful record. Buffett has said that Berkshire has been buying aggressively during the recent market turmoil.

Berkshire occasionally receives permission from the SEC to delay disclosing some stock purchases to prevent others from driving up the price of those stocks before Berkshire completes its purchases. Berkshire then discloses the purchases or sales in a subsequent quarter and issues amended reports for previous quarters.

The SEC says it grants such confidentiality to investment managers only when they can show they would be harmed substantially by immediate disclosure.

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U.S. stock futures are lower on worries about the broker MF Global and about Italy’s ability to repay its debts.

Bank stocks dropped sharply in premarket trading after the New York Federal Reserve said it suspended MF Global Holdings from conducting new business as a Treasury bond dealer.

Trading in MF Global shares was halted in premarket trading.

The Wall Street Journal reported Monday that MF Global would seek Chapter 11 bankruptcy protection after large investments in sovereign bonds issued by European countries went against it guaranteed high risk personal loans.

Before the opening bell, Dow Jones industrial average futures are down 106 points, or 1 percent, at 12,062. S&P 500 index futures are down 14, or 1.1 percent, at 1,266. Nasdaq 100 futures are down 23, or 1 percent, at 2,374.

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Chase is joining the list of banks that won’t be charging customers to use their debit cards, as the backlash over Bank of America’s planned $5 monthly fee continues.

The retail banking arm of JPMorgan Chase & Co. will stop charging $3-per-month fees for using debit cards when its current pilot in Wisconsin and Georgia is completed in November, a source with knowledge of the bank’s plans told The Associated Press.

The test program involves an “a-la-carte” checking account that allows customers to choose what banking products they want, said the individual, who asked not to be identified because the bank has not officially announced the program will not go forward.

Chase, which operates in 23 states, began its test in February. It’s not alone. Wells Fargo & Co. began a similar pilot in five states on Oct. 14, testing a flat $3 fee for using debit for purchases.

Other banks already have more widespread fee policies. SunTrust Banks charges $5 a month for debit cards used to make purchases, and Regions Financial Corp. charges $4.

But it was Bank of America Corp.’s plan to start charging $5 per month that lit the issue on fire. The Charlotte, N.C.-based bank, last month said it will begin assessing the fee in 2012.

Banks are justifying the fees by stating that they need to recoup revenue lost to new regulations that limit the fees they can collect from retailers for handling debit card transactions. But the new fees sparked a huge backlash.

Signs like, “I bailed out the banks and all I got was a $5 debit card fee” have been spotted the Occupy Wall Street protest in New York and its sibling protests around the country. The author of the regulations, Sen. Richard Durbin, D.-Ill, called the fee an “outrage” on the floor of the Senate.

`”It is hard to believe that a bank would impose such a fee on loyal customers who simply are trying to access their own money on deposit,” he said no teletrack payday loan. “Especially when Bank of America for years has been encouraging their customers to use debit cards as much as possible.”

Durbin encouraged customers of banks that charge fees to “vote with their feet,” but consumers were already ahead of him. Credit unions and community banks nationwide are reporting huge spikes in new accounts as consumers seek no-fee options.

“People are literally walking into branches and cutting up their Bank of America cards,” Kirk Kordeleski, CEO of Bethpage Federal Credit Union in Long Island, N.Y., said last week.

The backlash hasn’t gone unnoticed by other banks.

Citigroup Inc. almost immediately pointed to its policy of not charging for debit, although at the same time it changed requirements for its mid-tier checking accounts to make it harder to avoid a $20 per month service fee.

Huntington National Bank, Ally Bank, USAA and on Friday, TD Bank, are among those that are publicizing that they will not charge debit card fees. And institutions like CDC Federal Credit Union in Atlanta are sending emails out with “No Debit Card Fees” in the subject line to entice people to move their money.

The anger appears to be resonating.

On Friday, Bank of America bent. A source at the bank, who asked not to be identified because the policy is still evolving, said it likely it will offer ways for its customers to avoid debit card fees through using direct deposit, maintaining minimum balances or using Bank of America credit cards.

But a good deal of damage is already done. “Too little, too late,” one angry customer posted on Facebook. “I’ve already switched to USAA!”

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Libyan revolutionary forces claimed to have captured parts of a sprawling convention center that loyalists of Moammar Gadhafi have used as their main base in the ousted leader’s hometown and were shelling the city to try to rout snipers from rooftops in their offensive aimed at crushing this key bastion of the old regime.

The inability to take Sirte, the most important remaining stronghold of Gadhafi supporters, more than six weeks after the capital fell has stalled efforts by Libya’s new leaders to set a timeline for elections and move forward with a transition to democracy.

Gadhafi supporters also hold the enclave of Bani Walid, where revolutionary forces have been stymied by a challenging terrain. But the transitional leadership has said it will declare liberation after Sirte’s capture because that will mean it holds all of the seaports and harbors in the oil-rich Mediterranean coastal country.

British Defense Secretary Liam Fox pledged to keep up NATO airstrikes even after Sirte’s fall, saying the international military action would continue as long as the remnants of the regime pose a risk to the people of Libya.

“We have a message for those who are still fighting for Gadhafi that the game is over, you have been rejected by the people of Libya,” he told reporters Saturday in Tripoli before flying to Misrata.

Revolutionary forces began a major attack on Sirte on Friday after a three week siege from the outskirts of the coastal city, during which they said they were giving civilians time to flee. On Saturday, fighters fired rockets into the city from the backs of pickup trucks, though visibility was severely limited by a sandstorm.

Libya’s de facto leader, Mustafa Abdul-Jalil, the head of the governing National Transitional Council, said the battle for Sirte has been “ferocious,” with 15 revolutionary fighters killed and 180 wounded on Friday.

“Our fighters today are still dealing with the snipers positioned on the high buildings and we sustained heavy casualties,” he said at a joint news conference in Tripoli with Fox and Italian Defense Secretary Ignazio La Russa.

Abdel-Basit Haroun, a revolutionary field commander, said 32 people had been killed in two days of fighting, while the military council in the nearby city of Misrata, which has sent many fighters to Sirte, reported 80 wounded.

The council said revolutionary forces were attacking houses to try to eliminate the “overwhelming hordes of snipers out there.”

Sirte, 250 miles (400 kilometers) southeast of Tripoli, is key to the physical unity of the nation of some 6 million people, since it lies roughly in the center of the coastal plain where most Libyans live, blocking the easiest routes between east and west.

Mohammed al-Rajali, spokesman for the brigades attacking the city from the east, said the fighters have gained control of the Ouagadougou Convention Center, an ornate complex in the city center that Gadhafi frequently used for international summits. But they were meeting heavy resistance from villas behind the building so were focusing on firing artillery from the outskirts.

“After the intensive shelling, we will move forward,” he said.

A military spokesman in Tripoli, Abdul-Rahman Busin, and several commanders and fighters confirmed the center was under control of revolutionary forces.

“We have passed the area and we moved on to the residential area behind it,” brigade commander Musbah Alhadar said. “Our forces are camping around the center because the center itself has been destroyed by the NATO airstrikes and our artillery.”

Seizing the convention center complex, named after the capital of the West African nation of Burkino Faso, would be a significant gain for the attackers. Throughout the siege, Gadhafi fighters have used the walled complex as a base and stronghold. From there they were able to dominate surrounding neighborhoods and assault revolutionaries trying to enter Sirte.

Anti-Gadhafi forces also have surrounded the central Green Square and a presidential palace after fierce street fighting in the heart of the city.

Loyalist forces have been driven away from Ibn Sina Hospital where hundreds of civilians have sought refuge from the fighting, according to another commander, Suleiman Ali.

NATO warplanes flew overhead but no strikes were immediately reported.

Abdul-Jalil, meanwhile, called on the international community to help Libyans treat the wounded, saying they could deduct the cost from Libyan assets that were frozen under Gadhafi’s regime.

The international community has rallied around Libya’s efforts to move forward with forming a new government, with transitional leaders promising elections within eight months after liberation is declared.

Fox announced 500,000 pounds ($775,000) and extra military expertise to help Libya prevent the proliferation of weapons, including portable missiles capable of shooting down aircraft.

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TORONTO

Someone is about to play the fool _ Wall Street analysts or investors.

For months, analysts who write reports praising or panning stocks have been saying they were cheap. Investors were unconvinced, buying one day, selling the next. Last week, they mostly sold, and stocks got cheaper yet.

The Dow Jones industrial average rose slightly Friday but closed the week down 6.4 percent, its worst showing since the depths of the financial crisis three years ago. In the broader Standard & Poor’s 500, the selling pushed down all variety of stocks _ sexy high techs and staid utilities, risky small companies and cash-rich big ones.

Stock prices compared to expected profits are now nearly as low as they were in March 2009, a 12-year nadir that marked the beginning of one of the greatest bull markets in history.

Have investors sold too much, as they did back then?

“I’d be buying the market,” says Citigroup’s chief U.S. strategist Tobias Levkovitch, who warned that prices were too high in the spring. Says Harris Private Bank’s Jack Ablin, who sold $6 billion or so of stock in August, “We’re sharpening our pencils to figure out when to get back in.”

Who’s right _ or who’s about to play the fool _ may turn on earnings, or rather, analysts’ estimates of how fast they will grow.

Recently, they’ve been cutting them for companies in the S&P 500 as fears of another recession spread. But they’re still predicting they will earn 13 percent more earnings in the three months through September than they did in the same period a year ago, according to data provider FactSet. That would mark the eighth straight quarter of double-digit gains. And for the full year, analysts say earnings will hit a record.

“You can throw toss (those estimates) in the garbage,” says Peter Boockvar, equity strategist at brokerage Miller Tabak & Co. “Will Greece go bankrupt? What will be the extent of the global economic slowdown? I can’t get that out of an analyst report.”

If history is any guide, more cuts from analysts are coming.

One ominous sign: Those who changed their estimates this month chose to cut them more than six out 10 times, according to Citigroup. Early last month, raised estimates outnumbered lowered ones by nearly the same ratio.

Analysts are easy to bash. They usually tend to far too optimistic, cheering on stocks long after they’ve headed down. Now they want us to believe that companies can continue making record profits in the face of falling housing prices, tightfisted consumers, sputtering U.S. growth and a European debt crisis that is pushing a crucial market for U.S. exports closer to recession.

But it’s worth remembering that it’s been the naysayers, the investors, and not the optimistic analysts, who’ve mostly been wrong lately.

At the start of the bull market, investors worried that companies couldn’t generate enough profits in such an anemic economy. Then companies cut expenses to the bone, and profits soared. Investors next worried that companies wouldn’t be able to sell more, and that profits were bound to fall. And then companies defied expectations again with higher revenue, much of it overseas.

In fact, if anything, analysts haven’t been optimistic enough. For several quarters, nearly three out four companies have posted profits greater than analysts had estimated, FactSet says.

At Friday’s close, the S&P 500 was trading at 10.6 times analyst estimates for earnings over the next 12 months. That’s low for this so-called earnings multiple, which could mean stocks are cheap. When stocks bottomed on March 9, 2009, they were trading at 10.4 times estimated earnings. The 10-year average is 15.

Of course, the multiple might not look so appetizing in hindsight if companies’ results show the estimates were too high.

That won’t be clear at least for another two weeks when companies start reporting third-quarter results. But already investors are getting a taste of might be in store.

On Thursday, FedEx Corp., the world’s second-biggest package delivery company, met earnings expectations for the three months that ended in August. But it cut its target for full-year earnings, citing a slowdown in shipments from Asia. The stock fell to a two-year low.

Then, after the markets closed, some good news. Nike, the world’s largest athletic shoe maker, posted surprisingly strong earnings. It cited robust sales in India and China. The stock rose 5.3 percent Friday.

“The highest growth for companies has been in the emerging markets,” says John Butters, senior earnings analyst at FactSet. “We’re getting mixed signals.”

The good news is that even if analysts ended up playing the fools this time, stocks could still rise.

Harris Private Bank’s Ablin says analysts are “out to lunch” with their cheery projections. But he thinks investors may have overreacted, too. He says they’re selling as if earnings will fall 20 percent or so next year, which he thinks won’t happen.

“Investors are so dour, reality could surprise,” he says.

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