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S&P bounces off 10% drop as missed earnings build

The S&P 500 continued its decline Friday, briefly falling into an official correction at 10% below its last peak in early trading before recovering to about 8.8% below the mark set on Sept. 20 close of 2,930.75. Since Sept. 20, the index has failed to put together consecutive days of positive gains, with its better days typically following sizeable declines the day before. The index has had a volatile year; earlier in the first quarter it fell to the 10% sell-off mark only nine days after hitting a peak, and despite a modest recovery, it took five months to get back to where it started.

Through Thursday's close, 76.2% of the companies in the S&P 500 that have so far reported earnings topped consensus estimates. Conversely, 23.8% have missed their targets. While below the three-year average, only 15% of the S&P companies missed in the second quarter by the end of the reporting period. The percentage of positive surprises has declined since the start of third-quarter reporting season, which is only about one-third complete, a similar pattern to what was seen in the second quarter, albeit to a lesser degree.