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[AnderL]

UPDATE - reading that valuations are in play. Reporting that the S&P500 PE fell under 10 as of the open this morning.

half way though earnings season:

NEW YORK, Oct 28 (Reuters) - The corporate earnings picture has deteriorated further, according to Thomson Reuters data released on Tuesday, as fallout from the credit crisis and the deteriorating economy takes its toll.

With 49 percent of S&P 500 index constituents having reported third quarter earnings, analysts are now expecting a drop of 23.8 percent in overall S&P 500 earnings for the quarter, the data showed, with the financial sector leading the way lower.

That is down dramatically from an 11.3 percent drop forecast on Monday, when 45 percent of the S&P 500 had reported earnings, and marks the first time the third quarter's earnings drop is expected to be worse than the second quarter's.

The data blends reported and estimated third quarter earnings growth for the S&P 500.