Those Disappearing Earnings

With 63 percent of the companies in the S&P 500 having reported their fourth-quarter earnings, profits are set to contract for a third straight quarter, according to FactSet. That's actually a bit of a surprise: At the beginning of the year, analysts anticipated earnings for S&P 500 companies to rise by 0.8 percent this quarter.

That expectation has come down steadily as the first quarter has progressed. By January 22, the consenus estimate was for a 1.7 percent decline. As of last Friday, the estimate had fallen to a 5.3 percent contraction.

All 10 sectors in the S&P 500 have seen their first-quarter earnings estimates reduced by analysts since New Year’s, but energy has been the worst. Analysts started the year projecting a 43 percent first-quarter earnings drop for stocks in the S&P 500’s energy sector. By the end of January, the sector was projected to report a 69 percent decline; earnings are now expected to contract by a stunning 84 percent.