The much anticipated pullback is finally under way, some investors say, after a mid-week wobble. But the market is showing it still has some juice left – if earnings can meet towering expectations.

This earnings season, if you’re good, you’re just OK. If you’re just OK, you’re bad. And if you’re bad, you’re quickly taken outside and put out of your misery. Only the truly great are lauded – and even then not very much.

In an environment like that, and with a heavily extended market, disappointments are taken hard. The S&P 500 just ended its first down week in eight with underwhelming results from the likes of Goldman Sachs and Freeport McMoRan Copper & Gold weighing on indexes.

Some big energy companies such as Chevron and ConocoPhillips are reporting results this week. Expectations have been running up in the sector, the third- largest in the S&P 500, providing plenty of room for disappointment.

“We have been climbing up a mountain, and we are on a ledge here, so there is definitely a bit of a pause as people are going to need some evidence of accelerated recovery – not just baseline recovery,” said Rick Meckler, president of investment firm LibertyView Capital Management, in New York.

Analysts have beefed up expectations as stocks rocketed late last year on signs of an improving economy. S&P 500 earnings estimates for the current quarter were revised up 1 per cent over the last 60 days, according to data from StarMine.

Positive revisions were heavily concentrated in the technology, energy and materials sectors. Estimates in the materials sector were raised 5.7 per cent; in energy, they rose 4.8 per cent, and in technology, 2.3 per cent, StarMine said.

Unsurprisingly, those three sectors, along with financials, took the brunt of selling last week. Materials shares fell the most, losing 3.3 per cent over the week.

Wall Street will tune in to President Barack Obama’s State of the Union address tomorrow night, when he is expected to make job creation the No. 1 issue.

The Federal Reserve’s policy-making panel also will meet for the first time this year, convening tomorrow and concluding on Wednesday.