When Is Bad News Really Bad News ?

  • Conrad J
  • Cornell B
  • Landsman W
 et al. 
  • 2

    Readers

    Mendeley users who have this article in their library.
  • N/A

    Citations

    Citations of this article.

Abstract

We examine whether the price response to bad and good earnings shocks changes as the relative level of the market changes. The study is based on a complete sample of annual earnings announcements during the period 1988 to 1998. The relative level of the market is based on the difference between the current market P/E and the average market P/E over the prior 12 months. We find that the stock price response to negative earnings surprises increases as the relative level of the market rises. Furthermore, the difference between bad news and good news earn- ings response coefficients rises with the market.

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

There are no full text links

Authors

  • Jennifer Conrad

  • Bradford Cornell

  • Wayne R Landsman

  • Jennifer Conrad

  • Bradford Cornell

  • Wayne R Landsman

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free