Amazon’s news coupled with eBay’s announcement last week that they cut its forecast has Wall Street and those involved worried sick. Amazon.com (News - Alert) reported sales in the holiday quarter would fall short of Wall Street expectations. Amazon.com cut its 2008 revenue and income forecasts on Wednesday however shares still sank.

 

In hopes to turn out a better quarter, Amazon.com slashed their online prices not be but even that was not enough to counter the effects of the financial market crisis and foreshadows of a global recession.

 

“This is further confirmation that the economic downturn is much more pervasive than was earlier thought," said Sanford C. Bernstein analyst Jeffrey Lindsay.

 

"Online retailers were thought to be immune to it, but this is an indication that that is far from true," he said. "They are definitely signaling much worse returns in the fourth quarter."

 

Amazon’s shares fell about 15 percent in extended trading after closing at $49.99, 0.49 percent lower,  in Wednesday's regular session.

 

The company’s third-quarter net income rose to $118 million, or 27 cents per share, from $80 million, or 19 cents per share, from a year earlier. Revenue rose to $4.26 billion.

 

The company anticipates net sales for the fourth quarter, including the crucial holiday period, a growth of 6 percent to 23 percent. Amazon forecasts operating income at $145 million to $305 million.

 

As many analysts had predicted, Amazon cut its 2008 forecast, saying they now expect net sales of $18.46 billion to $19.46 billion, compared with their earlier forecast of $19.35 billion to $20.10 billion. The average analyst's estimate is $19.49 billion.