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Last week two Dow companies reported 3rd-quarter warnings to Wall St., FedEx (NYSE:FDX) and Intel (NASDAQ:INTC). Both should send up warning flags to investors.

FedEx warned that earnings per share would be in the range of $1.37 to $1.43 per share down from $1.45 to $1.60, blaming the global economic slowdown that constrained revenue growth for the quarter.

While both FedEx and UPS cut Asian capacity it should be looked at in the much larger context of a global slowdown.

As mentioned in an article here, the weakness from the HSBC Flash China Manufacturing PMI along with PMIs from Europe indicate that a global slowdown is taking place. As the holiday season approaches the weakness in New Orders is a foreshadowing sign that retailers may be taking a dim view for holiday sales, meaning less holiday traffic for FedEx.

Intel's warning is much more serious. The lowering of projected revenue by approximately 7% or $1 billion dollars to $12.9-13.5 billion from $13.8-14.8 billion indicates weak demand ahead of the launch of Windows 8 and just in time for the holiday season. Demand for smartphones and tablets is exploding, cutting away from PC demand as consumers and businesses look to either add tablets or shift their replacement cycle.

The story this year had been that Windows 8 would drive a PC replacement cycle for Intel, Microsoft (NASDAQ:MSFT), H-P (NYSE:HP), and Dell (NASDAQ:DELL). Unfortunately, this appears not to be the case.

The smartphone and tablet revolutions have changed the technology dynamic as people are shifting away from the boxy PC and toward more lightweight and portable devices, which allow them to stay in contact 24/7.

2nd-quarter earnings for the market disappointed as investors saw year-over-year growth drop to the single digits with no growth expected in the third quarter. In this environment, investors should be looking over their portfolios and tightening their stops as a disappointing earnings season approaches.

The S&P 500 (NYSEARCA:SPY) sells for more than 16 times earnings and no growth makes the market look more expensive every day with any new QE already priced into the market. For the past few months the market has been begging the Federal Reserve for another round of QE on hopes that the next meeting is the one where it will get the fix.

Unfortunately, when the fix comes it appears that we are set for a "buy the rumor, sell the news" period.

As the end of the third quarter approaches the amount of earnings warnings will increase as companies seek to get the bad news out of the way early. This will put a drag on the broader market as the economic slowdown filters through third-quarter earnings reports. Stocks that investors once thought of as safe may not be in the current slowdown - with many stocks expensive on a fundamental basis.

Source: What Do Warnings From FedEx And Intel Mean For The Market?