S&P 500 earnings reports are beginning to look like the early 2000s when investors shunned the shares of almost every company, even the shares of companies that reported strong earnings. That's a signal of a bear market.

"To date, S&P 500 companies that have reported a positive EPS surprise have seen a negative price reaction on average," John Butters, vice president and senior research analyst for FactSet, wrote in a piece posted to the company's site on May 20. "Companies that have reported positive earnings surprises for Q1 2022 have seen an average price decrease of 0.5% two days before the earnings release through two days after the earnings release. This percentage decrease is well below the five-year average price increase of 0.8% during this same window for companies reporting positive earnings surprises.

"That's the most significant average negative price response to positive EPS surprises reported by S&P 500 companies for a quarter since Q2 2011 (-2.1%)."

An excellent example of a negative response to solid earnings is Deere & Co., which reported strong top and bottom-line numbers last week, but saw its shares drop by double digits, taking shares of the entire sector down.

"Companies that have reported negative earnings surprises for Q1 2022 have seen an average price decrease of 5.4% two days before the earnings release through two days after the earnings release," added Butters. "This percentage decrease is much larger than the five-year average price decrease of 2.3% during this same window for companies reporting negative earnings surprises."

Many companies that reported negative earnings surprises saw their shares drop substantially, like Under Armour, which lost close to 34% of its value in early May after it missed earnings estimates.

Why do investors sell off the shares of companies with solid financial reports?

For a couple of reasons.

One of them is that these companies have been highfliers, meaning expectations ran high going into the reporting season. As a result, while the reported numbers were good enough to beat analysts' estimates, they were not good enough to beat the "whisper numbers," which were well above analysts' estimates.

Other reasons for the somewhat irrational behavior of investors toward companies with robust financial reports are heightened inflation, rising interest rates and the slow-down in the U.S. and global economy. They are expected to depress future revenues and earnings, and that's what counts the most for Wall Street -- a forward-looking market, discounting good and bad news ahead of time.

Those who have been around Wall Street long enough have seen this show before in 2000, when financial numbers from the highfliers of that time failed to appease the optimistic expectations of Nasdaq traders.

We all know what happened next. The Nasdaq entered a bear market, which lasted almost a decade, took the index from over 5,000 to below 2,000, and washed away the profitless dotcom and network companies.

Investors should be reminded of the words of Mark Twain -- that history doesn't repeat itself, but it often rhymes.

Editor's note: The author owns shares of Deere & Co.