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Q4 Earnings Estimates Trickle Lower

Below is a chart highlighting the change in S&P 500 Q4 earnings growth estimates (YoY) since the fourth quarter began.  As shown, growth estimates have been continuously trickling lower.  On September 30th, the bottoms up estimate (from Bloomberg) for S&P 500 earnings growth stood at 14.1%.  As of yesterday, the estimate had dipped to 6.2%.  While this trend lower in earnings estimates can be viewed as a negative, it also opens up the door for companies to beat expectations at a higher clip.

For those interested, below are the current Q4 YoY earnings growth estimates for the ten S&P 500 sectors.  As shown, Energy has the strongest reading at 21%, followed by Industrials at 7.6% and Technology at 6.6%.  Telecom, Materials, and Utilities are the three sectors that are projected to see earnings decline in Q4 2011 versus Q4 2010. 

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