We sold on the news!
Investors often “buy on the rumor, sell on the news,” regarding big announcements ranging from product releases to earnings results. While it’s early, there are some signs investors are taking that tack with 3Q earnings.
With major stock indexes up more than 50% from their early March lows, it’s safe to wonder whether the seven-month old rally can maintain momentum throughout the next few weeks amid a plethora of earnings reports that the market is counting on to be pretty strong.
“If stocks sell off even after companies post in-line or slightly better than expected earnings, such market action could be the first sign that a long overdue correction in stock prices is on the horizon,” says Chad Brand, founder and president of Peridot Capital Management.
Early indicators aren’t promising. Johnson & Johnson (JNJ) posts a 3Q profit this morning and boosts its ’09 outlook, but shares are down 2.6% at $60.90. The losses nearly erased the 3% gain J&J achieved this month prior to today’s action.
