Updated from 2:41 p.m. ET with information on Alcoa's report, a warning in the semiconductor sector.

NEW YORK ( TheStreet) -- Before the employment picture went dim (again), and European debt contagion fears burst back onto the scene, it seemed Wall Street was pretty bullish about second-quarter earnings season.

Not so much anymore. Slowly but surely, analyst expectations have been coming down. More worrisome perhaps is that warning season was a whopper. According to Thomson Reuters data, 84 companies in the S&P 500 have already issued negative preannouncements about their second-quarter results, roughly 17% of the index, vs. 33 positive preannouncements.

That makes for a 2.6 negative/positive ratio, which Thomson Reuters says compares to ratios of 1.2 and 1.8 for last year's second quarter and 2011's first quarter, respectively.

This is especially concerning because companies theoretically do such a good job of managing expectations these days. More than 70% of companies typically beat the consensus view. This renders the idea that they are really outperforming to a great degree almost meaningless, but it also means that when they miss, they really do miss.

After Monday's closing bell, Microchip Technology ( MCHP) joined the warnings parade. The company made a sizable cut to its expectations for the June-ended quarter, citing "weak global market conditions" that it believes are impacting the whole semiconductor industry and could linger into the September quarter. A slew of chip companies lurched lower in late trades on the news.

In addition to the warnings, the cumulative share-weighted earnings view for the S&P 500 has come down more than 6% in the past month. As of July 9, Wall Street was expecting earnings of $218.3 billion from the S&P 500 for the calendar second quarter, according to Thomson Reuters data. A week ago, the estimate was $222.9 billion, and on April 1, it stood at $229.6 billion.

The bullishness peaked on June 9 when the estimate reached $232.5 billion but it's been down every week since then, even as the market roared back, supposedly in part because of earnings optimism.

The main drags on the numbers have been the financial and consumer discretionary sectors, whose warnings and falling estimates have outpaced increases for the energy and telecommunications sectors.

Alcoa ( AA) kicked things off after Monday's closing bell as the first component of the Dow Jones Industrial Average to report its quarterly results, and the performance was mixed. While revenue came in well ahead of consensus, earnings only met views (and there was some confusion about that) with the company noting higher energy and materials costs in the quarter.

Of more concern to the market are the big banks that will follow later this week and the next.

The fresh uncertainty in Europe, as evidenced by Italy's travails, appears to be the main driver for Monday's sell-off in the financials with the SPDR KBW Bank ETF ( KBE) down 2.5% but there's also some earnings worries mixed in there.

JPMorgan Chase ( JPM) is reporting on Thursday, and Citigroup ( C) follows on Friday. If their results are underwhelming and the commentary from management is similarly dour, watch out. Especially since the housing market is nowhere near ready to start helping out.

Next week, among the high-profile names on tap are Bank of America ( BAC), Wells Fargo ( WFC), and Goldman Sachs ( GS) due on July 19, and General Electric ( GE), a barometer for just about everything, on July 22.

Keefe, Bruyette & Woods in a June 29 research note previewing the financial sector's performance said Wall Street could be in for a replay of the fourth quarter of 2010, when many banks, including Bank of America and Citigroup, missed badly as they were unable to generate any kind of momentum on the top line.

"Investors are likely to be disappointed with second-quarter results for the universal banks, as the combination of a challenging trading and interest rate environment is likely to result in declining revenue trends," the firm said at that time. "Similar to 4Q10, elevated concerns regarding sovereign risk coupled with concerns regarding global economic growth caused investors to scale back risk-taking strategies, resulting in poor volumes across Wall Street trading desks."

This week, just 11 S&P 500 companies are due to report. Aside from the ones previously mentioned (Alcoa, JPMorgan and Citigroup), they are Novellus Systems ( NVLS) later on Monday; Fastenal ( FAST) on Tuesday; Yum! Brands ( YUM) and Marriott ( MAR) on Wednesday; Google ( GOOG) on Thursday; and First Horizon ( FHN), Mattel ( MAT), and Genuine Parts ( GPC) on Friday.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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