When It Comes to Second-Quarter Earnings, Investors Hope for Worst

Company, heal thyself.

With the second-quarter earnings season kicking off after the July 4 holiday, investors are hoping to hear that companies are starting to salve their deep wounds.

Investors are already conceding terrible earnings figures for the quarter that was. Year-over-year earnings for S&P 500 companies are expected to have declined 16.9%, the worst quarter since the 1991 recession, according to earnings tracker Thomson Financial/First Call. First-quarter earnings were down 6.3%. Most sectors are going to show declines, with the most horrible results from technology and transportation and the best in energy and health care.

The hope among investors is that the second quarter was the absolute worst of the profits collapse. Because there's no way to predict future performance, investors will key in on the outlook companies give when they release their earnings reports -- whether they sound more encouraged and if there are tangible reasons for encouragement. ...