After three years of growth, earnings increases are slowing. Income in the S&P 500 advanced an average of 4.3 percent in each of the last five quarters, compared to the 28 percent average for 2010 and 2011, Bloomberg data show.

“You will need a strong acceleration of earnings in the third and fourth quarters for the full-year estimates to come through,” Robert Royle, a manager at the North American Trust fund of Smith & Williamson Investment Management LLP, who helps oversee $21 billion in London, said July 2. “You’ll have multiple expansion in an economy that’s not really growing fast enough.”

Slower Growth

U.S. gross domestic product will increase 1.9 percent this year, down from 2.2 percent in 2012, according to the median projection of 86 economists. The recovery since the 2009 recession is the slowest since World War II, data compiled by Bloomberg show.

While analysts say profits in the third and fourth quarters will rise 5.5 percent and 11.2 percent, respectively, their forecasts usually come down as the reporting season approaches. Since 2009, projections have declined 6.2 percentage points in the six months leading up to a quarter’s end, according to data compiled by Bloomberg.

Lower expectations helped about 73 percent of the companies in the benchmark measure exceed forecasts by an average of 5.1 percent for the first three months of the year, according to data compiled by Bloomberg. At the same time, 51 percent of companies reported sales that trailed estimates.

Lower Bar

Analysts are looking past profit growth this year and predicting improving investor sentiment will push stocks higher. They’ve boosted price estimates for the S&P 500 by 11 percent from 1,608.50 on Dec. 28, the fastest rate since July 2011, according to data compiled by Bloomberg.

U.S. equity volume, in retreat since 2009, is showing signs of picking up. Trading on all American markets has averaged 6.77 billion shares a day since the start of June, compared with 6.35 billion between January and May and 6.42 billion in 2012, according to data compiled by Bloomberg.

Shares of the three biggest public discount brokerages have rallied an average of 51 percent this year as individual investors buy and sell more equities. Daily average revenue- generating trades increased an average of 14 percent in May, compared to a year ago, according to data from Charles Schwab Corp., TD Ameritrade and E*Trade Financial Corp.