A slowdown in the nation’s overheated housing market has some analysts predicting that home construction is dropping into a bottomless chasm. But things may not be as bleak as the pessimists are predicting.

For one thing, the stocks of home building companies are seeing a boom on Wall Street, enjoying a bull run of more than 20 percent since midsummer. Part of the reason: anecdotal reports that a few more buyers are motoring to sales centers at outlying subdivisions.

A fresh reading on the industry occurs Wednesday, with housing starts for September. In August, the level of construction plummeted by 6 percent, a worse showing than analysts were expecting, to an annual rate of 1.665 million units. Watch for a very modest rebound.

Recently, sales of new homes have been running 22 percent below the levels of last autumn, said Mario Ricchio, senior homebuilding analyst for Zacks Investment Research.

“In essence, it took only 10 months to slice new home demand by more than a fifth,” he said. However, during the same period, prices of houses remained nearly flat.

Ricchio’s bottom line: “Since nationwide home prices are holding up relatively well – with builder incentives acting as a support – the housing market appears headed for a soft landing.”

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It may be too early to think about holiday shopping, but not too soon for merchants to begin shaking the dust from end-of-year displays.

The best news for retailers is coming at the gas pump, where consumers are facing fuel costs as much as 70 cents below where they stood at midsummer, says Chicago economist Diane Swonk. She believes that oil soon should be selling for $40 to $50 a barrel, far below the $78.40 that it commanded in mid-July.

“The result should be welcome news for consumers and retailers as we enter the critical holiday shopping season,” said Swonk, of Mesirow Financial. “The payoffs will be uneven, however, with wealthy households reacting much faster to the decline in oil prices than middle-income households, who must first unburden themselves of the debts incurred when oil prices were higher.”

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It’s bottom-line time for the stock market, as third-quarter corporate profits begin rolling out in earnest.

Profit growth has continued at double-digit rates for 17 quarter in a row, recently running at 12 to 14 percent, says Chicago investment manager Marshall Front. At this point, corporate earnings make up the highest percentage of gross domestic product seen in data going back to 1947.

However, forecasts for the next 12 months are too high, says Front, of Front Barnett Associates.

Thanks to rising wages, slower productivity growth, weaker housing and ho-hum levels of consumer spending, profits will be crimped, “leading to a gradual deceleration of profit growth to a range of 6 to 8 percent in 2007,” he says.