Guest post by Tony Sagami 

“Earnings are the mother's milk of stocks.”  – Old Wall Street adage

Alcoa is the first major company to report its quarterly results, so it often sets the tone for the rest of earnings season. If Alcoa's results are any indication, things could get very ugly very fast.

It's no secret that commodity prices have dropped, but the impact on corporate profits is worse than Wall Street expects.

Alcoa reported earnings well below Wall Street's already-lowered expectations of 7 cents per share on $5.57 billion in revenue; much lower than the 13 cents per share on a $5.65 billion forecast.

Alcoa shares got hit hard on that big miss, and while nobody likes losing money, it is a painful reminder that nothing goes up forever.

In the last 15 years, we've seen two painful bear markets that temporarily wiped out investors' capital: $5 trillion during the dot-com bust and $7 trillion in the financial crisis of 2008.

The stock market goes up and the stock market goes down, but one thing that doesn't change is the hunt for companies that are still growing their earnings.

If you can identify those companies… you will make money.

The earnings of the 500 stocks that make up the S&P 500 peaked in the third quarter of 2014 and have fallen since then. However, that doesn't mean profits are falling everywhere.

Six out of the nine broad sector categories have seen their profits fall. Profits of energy companies (no surprise) have dropped the most, followed by Consumer Staples, Financials, Industrials, Materials, and Utilities.

However, the profits of Health Care (+28.7%), Consumer Discretionary (+12.1%), and Information Technology (+10.6%) are up during the same period.

More importantly, the stocks in those sectors that are growing their profits also delivered the best performance. As the chart below shows, Health Care and Consumer Discretionary were the two strongest-performing sectors.