While the stock market is up sharply since early March, corporate earnings continue to suffer. This chart (courtesy of chartoftheday.com) helps provide some perspective as to the magnitude of the current economic decline.
The chart illustrates that S&P 500 earnings have declined over 90% over the past 20 months (with over 90% of S&P 500 companies having reported for Q1, 2009), the largest decline on record. In fact, real earnings have dropped to a record low and if current estimates hold, Q3 2009 will see the first 12-month period during which S&P 500 earnings are negative.
However, the stock market commonly improves before corporate earnings. Thus, the past two months of market performance has to be considered an encouraging sign.