The New York TimesandWall Street Journal: Does Their Coverage of Earnings Announcements Cause 'Stale' News to Become 'New' News?

Autor: Matt Pinnuck
Rok vydání: 2014
Předmět:
Zdroj: Journal of Behavioral Finance. 15:120-132
ISSN: 1542-7579
1542-7560
Popis: Recent research suggests that the stock market reacts to stale information if it is reported in the media because it is gives the impression of being “new” news. The objective of this study is to provide a unique test of this hypothesis using the time-series properties of quarterly earnings. It is well documented that seasonally differenced quarterly earnings for adjacent quarters are positively correlated. Therefore a component of current quarter earnings when reported is news that was known or predictable at the end of the prior quarter and thus is old news. We find for those firms that receive media coverage in the Wall Street Journal and The New York Times that the price reaction at the time of the announcement of current earnings to past quarter's seasonally differenced quarterly earnings is greater than those firms that do not receive media coverage. The result is consistent with stale earnings information being given the appearance of new information resulting in a further price reaction. This sugg...
Databáze: OpenAIRE
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