NEW YORK ( TheStreet) -- Earnings season is upon us once again, and unsurprisingly Wall Street's growth expectations for the third quarter aren't quite as bullish as they were back at the peak of summer.

S&P Capital IQ says the consensus estimate for third-quarter operating earnings for the S&P 500 now sits at $24.43 per share, up 13% from last year's equivalent quarter but down 3.4% from $25.30 as of July 27. All 10 S&P sectors saw declines in expectations over that span with the financials (down 10.2%), telecom services (off 6.5%) and materials (sliding 5%) seeing the biggest drops.

The volatility in stocks since August has brought reined in optimism ahead of the flood of third-quarter reports. The major U.S. equity indices are all still off more than 10% from their late April highs, and economic data was dismal through the end of the summer, only recently showing some signs of life. Add in the uncertainty about the sovereign debt situation in Europe and it's no wonder estimates have come down in the past three months.

That may make it tough for stocks to rally much, even if results come out ahead of consensus, which typically seven of out of 10 companies are able to do.

" T he bar has been set quite low, possibly allowing narrow 'beats' to garner favorable responses," wrote Sam Stovall, chief equity strategist at S&P, in recent commentary. "Yet, the enthusiasm could be short lived as forward estimates remain cautious."

For the whole of 2011, the S&P 500 is now seen earning $99.32 per share, a dip of 1.2% from $100.52 per share as of July 27, but up 16.4% year-over-year. Two of the 10 S&P sectors saw increases in estimates since summer, consumer discretionary (up 0.6%) and health care (rising 0.4%).

The sectors seen generating the highest year-over-year gains in the third quarter are energy, where earnings are expected to jump 50.1%; materials, seen delivering profit growth of 29%; and consumer discretionary, where earnings are expected to rise 18.8%. The only sector anticipated to see earnings fall from last year's levels is utilities, estimated to be down 2.3%.

S&P Capital IQ also offered up a few observations on individual companies within the S&P 500 ahead of the quarter. The firm listed Allegheny Technologies ( ATI), Morgan Stanley ( MS), and HCP ( HCP) as having the highest growth expectations to live up to as the trio is expected to deliver year-over-year earnings increases of 1209%, 750%, and 746%, respectively.

The companies that have seen the most upward earnings revisions from analysts for the calendar third quarter are Apple ( AAPL) and CME Group ( CME) at 15, followed by IntercontinentalExchange ( ICE) at 14.

S&P Capital IQ also said that the S&P 500 companies with the biggest potential upside based on its target prices as of Oct. 7 were Nabors Industries ( NBR), 129%; Alpha Natural Resources ( ANR), 124%; and Denbury Resources ( DNR), 119%.

Thomson Reuters has a similar view of trend in estimates ahead of this earnings season, putting its blended earnings growth view for the S&P 500 at 12.6% as of Friday, down from 17% as of July 1.

From a historical perspective, Thomson's data finds the third quarter is anticipated to show a return to increased growth levels after second-quarter earnings increased 12.1% from the previous year, a decline compared to the first quarter's growth rate of 18.9%.

Thomson also provides some insight into how warning season went, saying there were 127 pre-announcements by S&P 500 components, 88 of which were negative, 8 were in-line and 33 were positive. The 2.6 ratio of negative-to-positive outlooks was above both the year-ago and long-term average ratio of 2.3.

-- Written by Michael Baron in New York.

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