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Stock Price Reactions to The Wall Street Journal's Securities Recommendations

Published online by Cambridge University Press:  06 April 2009

Pu Liu ,
Stanley D. Smith  and
Azmat A. Syed
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Abstract

This paper examines the impact of the “Heard-on-the-Street” (HOTS) column of The Wall Street Journal on common stock prices. The results of the study indicate that the HOTS column appears to have an impact on stock prices on the publication day; however, we also find a smaller, but statistically significant, impact on two days preceding the publication. The significant abnormal returns on these days are associated with higher trading volume. The reaction of stock prices is symmetric with respect to the buy and sell recommendations, and the impact of single-company recommendations is greater than the impact of the multi-company recommendations.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 25 , Issue 3 , September 1990 , pp. 399 - 410
Copyright
Copyright © School of Business Administration, University of Washington 1990

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