TITLE

Earnings Announcements, Analyst Forecasts, and Trading Volume

AUTHOR(S)
MINSUP SONG
PUB. DATE
December 2013
SOURCE
Seoul Journal of Business;Dec2013, Vol. 19 Issue 2, p1
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Empirical evidence shows that a significant proportion of analysts issue their forecasts at the time of an earnings announcement (Ivković and Jegadeesh 2004). These forecasts are commonly regarded as analyst interpretations of earnings news contained in the announcement (Schipper 1991). Although analytical studies suggest that market reaction to news from earnings announcement could be affected by analysts' interpretation information (Kim and Verrecchia 1994, 1997), the vast majority of previous research has ignored whether and how these analysts' interpreting forecasts affect the market reaction to the earnings announcements. Our empirical results show that sensitivity of trading volume reaction to earnings announcements is increasing in the number of announcement period analyst forecasts. The sensitivity of trading volume reaction is greater when there is small analyst forecast dispersion. We also find that stock return sensitivity is also increasing with the number of analyst forecasts. In general, our results suggests that analysts' interpretation help disseminate new information contained in earnings announcement to the market.
ACCESSION #
95312383

 

Related Articles

  • National Market System (NMS) (US).  // International Dictionary of Finance, 4th Edition;2003, p186 

    Information on the term National Market System (NMS) (US) is presented. It refers to a system providing information on the quoted price of stocks, the latest price paid, the high and low for the day and the current volume. NMS brokers are required to report this information through the system...

  • STOCK MARKET OVERREACTION AND TRADING VOLUME: EVIDENCE FROM MALAYSIA. Ali, Ruhani; Ahmad, Zamri; Anusakumar, Shangkari V. // Asian Academy of Management Journal of Accounting & Finance;2011, Vol. 7 Issue 2, p103 

    We investigate the stock market overreaction in Bursa Malaysia from January 2000 to October 2010 using weekly data. We find that winner portfolios tend to have negative returns whereas loser portfolios have positive returns for various holding periods from 1 to 52 weeks. Loser stocks experience...

  • An Empirical Analysis of the Effects of Online Trading on Stock Price and Trading Volume Reactions to Earnings Announcements. AHMED, ANWER S.; SCHNEIBLE JR., RICHARD A.; STEVENS, DOUGLAS E. // Contemporary Accounting Research;Fall2003, Vol. 20 Issue 3, p413 

    This study provides evidence regarding the effects of online trading on stock price and trading volume reactions to quarterly earnings announcements. We test for differences in stock price and volume reactions to quarterly earnings announcements between a period with a significant amount of...

  • Asymmetric stock price and liquidity responses to changes in the FTSE SmallCap index. Biktimirov, Ernest; Li, Boya // Review of Quantitative Finance & Accounting;Jan2014, Vol. 42 Issue 1, p95 

    We examine market reactions to changes in the FTSE SmallCap index membership, which are determined quarterly based on market capitalization and are free of information effects. Our main results are asymmetric price and liquidity responses between the firms that are shifted between FTSE indexes...

  • FEAR, GREED, AND TRADING ACTIVITIES. Chin-Shui Lo // Proceedings for the Northeast Region Decision Sciences Institute;2013, p316 

    This study uses the VIX debuted in 1993 to construct fear and greed indices for financial markets and to examine the effects of fear and greed on trading activities in Taiwan. We find that fear is negatively associated with and that greed is positively associated with trading activities. In high...

  • DOES THE SUBPRIME CRISIS AFFECT CREDIT DEFAULT SWAP MARKETS? Naifar, Nader // Journal of Applied Research in Finance (JARF);Jun2010, Vol. 2 Issue 1, p68 

    This paper investigates the impact of the Subprime crisis on the Credit Default Swap (CDS) market. The Subprime crisis presents a serious risk to global financial markets. The Japanese credit markets faces growing bank losses and a cruel market environment accompanied by a slowing economy and...

  • "Crude Oil Price Velocity and Stock Market Ripple". Sharma, Nidhi; Khanna, Kirti // International Journal of Exclusive Management Research;Jul2012, Vol. 2 Issue 7, p1 

    In this new era of economic growth, the exceptional increase in the crude oil prices is one of the significant developments that affecting the global economy. Crude oil is an important raw material used for manufacturing many goods, so that an extraordinary increase in the price of oil is bound...

  • The More We Know about the Fundamental, the Less We Agree on the Price. Kondor, Péter // Review of Economic Studies;Jul2012, Vol. 79 Issue 3, p1175 

    I allow trading horizon heterogeneity across groups in a standard differential information model of a financial market. This approach can explain the well-established phenomenon that, after a public announcement, trading volume increases, more private information is incorporated into prices and...

  • JSE.  // Finweek;3/19/2009, p80 

    Several tables are presented that feature the performance of various stocks in the Johannesburg Stock Exchange (JSE) including investor statistics as of March 11, 2009, dividend ranking and earning multiple ranking.

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics