Fear Takes a Holiday

According to Thomson First Call, year-over-year earnings growth for the S&P 500 in the first quarter is expected at 3.7%, down from expectations of 8.7% growth at the start of the year. Most of the deterioration has come from the energy sector, which is now expected to show a 3% decline in year-over-year growth. Expectations for growth in the technology and consumer discretionary sectors also are deteriorating, says John Butters, a Thomson analyst.

Supporting the notion that companies are becoming more cautions with their guidance, the number of positive preannouncements is down 20% to 40% compared with any of the past four quarters, says Butters. The number of negatives announcements has not increased.

So enjoy the breather while it lasts, because the notion of "everything going my way" is just a corny song from a musical, not a sustainable state for the stock market.

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