A Growing Share of S&P 500 Companies’ Earnings Are Contracting

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Investors who have shrugged off tepid earnings growth this year have leaned on the argument that the majority of S&P 500 companies have wound up beating analysts’ expectations. Morgan Stanley’s wealth-management unit isn’t sold on that argument.

The money manager found in an analysis of earnings that more than a third of S&P 500 companies have posted a year-over-year decline in earnings in 2019. The last times the share of companies posting contracting earnings was that high: 2009, 2008 and 2002, all periods when the…