Soaring Oil a Drag on Markets

Stocks dropped mid-morning as oil is spiking just shy of $120. At this point, oil is a major drag on the markets.

Speaking of stocks: we are about one-third through with first-quarter earnings, and it is not shaping up to be a great start.

So far, 143 companies are reporting, 62 percent beat estimates (about in line with historic average), 15 percent matched, 24 percent miss -- which is higher than normal.

But that doesn't really tell the real story.

So far, if you take all 143 companies together, on average companies are missing their estimates by 2.3 percent, thanks to high profile misses by General Electric , Wachovia , Bank of America , Pfizer and others.

Typically, companies as a whole BEAT by about 3 percent. True, a good part of this problem comes from financials, but still it is a stunning reversal of a pattern that has prevailed for many years.

Surprisingly, we are not seeing analysts taking down estimates aggressively for the second quarter.

I say surprisingly, because analysts have been spectacularly wrong going into the last two quarters, forced to aggressively move numbers down. They are not doing it, so far, for the second quarter. They are making modest moves to take financials earnings estimates down, and even more modest moves to take consumer discretionary (retailers) companies down as well (from 0 percent gain to down 2 percent). Is that enough? We'll see.

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