Specialist Mike Pistillo, left, and trader Timothy Nick work on the floor of the New York Stock Exchange, Monday, Aug. 3, 2015.(AP Photo/Richard Drew)
Your feedback is important to us!
We invite all our readers to share with us their views and comments about this article.
Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.
Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)
Investors in U.S. stocks are rediscovering the power of earnings. In the Nasdaq 100 Index, companies have swung up or down an average of more than 5 percent immediately after reporting results in the past three weeks, the highest since 2012, data compiled by Bloomberg show. With 65 companies in the Nasdaq 100 reporting, stocks are moving at a market-adjusted rate of 5.1 percent in either direction in the session immediately after the release of results. That compares with a 15-year high of 7.4 percent in the third quarter of 2008 and an average 3.7 percent jolt last quarter, the smallest since at least 2006 .Since the first quarter of 2014, Nasdaq companies have beaten earnings estimates by an average 5.4 percent.One reason investors are drawing greater distinctions among companies is that overall S&P 500 profit growth is forecast to slow to less than 1 percent in 2015, down from an annual rate of 15 percent since 2009 .The average price of companies with the biggest reactions to earnings is 41 times annual profit, compared with 29 times for companies with smaller moves.
FOLLOW THIS ARTICLE