First-quarter earnings season has not been as good as the bulls want you to believe.

Through Thursday night, approximately 190 members of the S&P 500 have reported. Median per share earnings for those companies is -23.2%. If we factor in projections for the firms yet to report, median earnings are likely to be -20.8%, a significant drop from a year ago.

After all the results are in, more than 360 S&P 500 members are expected to have reported a year-over-year decline in profits.

What’s more interesting is the reaction to results. Though many companies are reporting better-than-feared numbers, the positive surprises are not having a significant impact on full-year forecasts.

Among companies that have reported in the last 2 weeks:

• 59 have had net positive revisions in full-year forecasts
• 81 have had net negative revisions in full-year forecasts

To be fair, the proportion of negative to positive earnings estimate revisions is improving. Nonetheless, negative revisions still outnumber positive revisions by a ratio of 2:1.

These numbers are not shocking. We are in the midst of a severe recession and the timing of a recovery remains unclear.

Portfolio Updates

Monro Muffler Brake (MNRO) was added to the Focus List. The big trends in the automotive sector are higher prices for used cars and greater spending on maintenance. MNRO gave us the best combination of exposure to these trends, as well as rising estimates and an attractive valuation.

We sold Shanda Interactive (SNDA) at the start of the week from the Focus List, locking in a 3-month return of about 60%. The stock has been volatile of late and it just didn’t make sense to be greedy. We will consider adding it back at some point in the future.

Natural Resource Partners (NRP) was sold from the Growth & Income portfolio. NRP was downgraded to Zacks #4 Rank as full-year estimates were recently cut. We locked in a gain of approximately 10%.

The Markets

The major indexes have been pretty much flat over the past 2 weeks. Given all of the volatility we have had over the past 6 months, this is a nice change.

The light volume suggests that the bulls have stopped buying. But, the bears have yet to return. Earnings have yet to inspire either the bulls or the bears. It could also be that many traders are waiting for the results of the stress tests.

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Charles Rotblut, CFA is the Senior Market Analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Zacks Investment Research

Last 5 posts by Charles Rotblut

• Final Thoughts - Market Analysis - October 26th, 2009
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• Zacks Earnings Preview: Eastman Chemical, E.I. DuPont, T. Rowe Price, Western Digital and SuperValu - Press Releases - October 19th, 2009