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Energy companies may rain on S&P 500 earnings parade

Energy companies are expected to report a sharp drop in earnings, dampening the S&P 500’s momentum.

So far corporate earnings season surprisingly has buoyed the stock market, helping the main indexes to some of their best gains in years. But October’s big run could fade into a distant memory this week with the earnings calendar laden by the languishing energy-sector.

“About half of S&P 500 companies have reported with 67% beating on bottom-line with an earnings surprise of plus 3.4%. More importantly, guidance activity so far has been better than feared.” strategist Dubravko Lakos-Bujas at J.P. Morgan said in his report.

Energy companies are likely to be spoilers, with the sector expected to post an earnings decline of 65% year-over-year, as crude-oil prices remain depressed.

West Texas Intermediate crude-oil CLZ5, +0.72% settled at $46.59 a barrel on the New York Mercantile Exchange Friday, down 43% over the past year. The international benchmark brent crude LCOZ5, +1.43% traded at $49.56 a barrel, also off 43% in the past 12 months.

By segment, upstream, or exploration-and-production, earnings are projected to slump 95%...


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