Analysts now expect the earnings recession to last through the third quarter

While earnings usually come in substantially ahead of expectations — as much as 4 or 5 percentage points is not unusual — the downward direction in the outlook doesn't speak well for what lies ahead

. FactSet Q3 estimates have dwindled from expectations for a 3.4% gain to the negative number now in the forecast.

The primary culprit for the downward trend has been weakness for multinational companies. FactSet recently estimated that companies that do more than half their business outside the U.S.in Q2. Those that do a majority of sales domestically were projected to see a 1.4% growth rate. In similar fashion, the lowered Q3 estimates are coming from sectors that have large international exposure — energy and information technology . Tech is ranked first on the S&P 500 in international exposure while energy is fourth.Companies that derive a high level of sales from overseas — think firms like

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