Banks Supplant Energy in Destroying S&P 500 Growth Outlook
- Analyst estimates for financials drop the most in four years
- Biggest profit contributor turning to one of the biggest drags
This article is for subscribers only.
The two-quarter retreat in Standard & Poor’s 500 Index earnings is about to become a three-quarter swoon, and this time it isn’t just because of plunging energy prices.
Bank profit estimates are falling at the fastest pace in four years, bringing the overall forecast for S&P 500 earnings in the fourth quarter to a decline of 5.6 percent, compared with a gain of 1.4 percent as recently as August. Financial institutions are exerting an ever-increasing drag on analyst projections: what had been expected to be a 16 percent surge in their October-to-December income has narrowed to less than 1 percent.