It's only the third-day in June, but already investors are growing fearful about end of quarter earnings reports. There's still almost a month to go before most public companies close out their books for the second-quarter, ended June 30.

Meanwhile, on Wall Street, analysts are slashing profit forecasts that still look way too high to me.

Already, high-profile investment firm Lehman Brothers (which, like some other brokers, closed its books May 31) plunged in value on speculation of a large loss this quarter. It will be Lehman's first loss in nearly 25 years – and more asset write-offs are likely. Lehman will fess-up on June 16… stay tuned.

Also, two leading banks just sacked their CEOs amid mounting sub-prime losses. Wachovia get rid of Ken Thompson, who had the misfortune of buying California lender Golden West Financial for $25 billion… pretty much at the top of the sub-prime boom two years ago.

More Heads Will Roll on Wall Street That acquisition turned out… badly, to say the least. Meanwhile, Washington Mutual's Chairman will "step down" according to the bank.

These are just the latest casualties from the sub-prime credit crunch, but rest assured, more heads will role before this financial reign-of-terror is over.

And it's not just the financial sector issuing bad news as earnings season approaches. Other blue-chip names including Ford Motor and Dow Chemical have reported negative earnings surprises recently.

Overall, S&P 500 profits are expected to drop 7.3% this quarter, according to current Wall Street estimates. Ah, but it's still early! Just a few months back, at the beginning of 2008, analysts expected mid-single-digit profit gains in both the first- and second quarter.

Of course profits plunged almost 18% in the first quarter. So Wall Street was somewhat off target then, and probably is again now.

Separating the Second Quarter Winners & Losers

Financial stocks are expected to fare the worst, once again this quarter (surprise, surprise). "They are predicted to suffer a 44% earnings fall after an 80% drop last time around," according to the Wall Street Journal. Consumer discretionary shares are next in line, with an earnings hit of -10% expected this period.

There is some good news however. Energy sector stocks should post 16% earnings gains, which is no surprise with sky-high oil and gas prices. Tech-sector profits are also expected to shine this quarter, which is a pleasant-surprise to investors amid a slowing economy.

Technology stocks are enjoying a healthy export boom, due in part to the falling buck, but also from healthy demand from overseas markets. The vast majority of big tech firms from Intel to Cisco now generate the majority of sales from outside the U.S. – and business is still booming in many of these areas.

Also, tech companies just aren't as impacted by soaring raw-material costs, like rising oil prices, which does impact so many other sectors of the economy.