The reason for stock prices to rise even in bad news

Share price rise to be announced "good news", if you crash as "bad news" is published in reverse, but it generally has been captured. But such quarter earnings announcement is made in deficit, despite being announced bad news for companies, stock prices might rise to reverse. Why there is no relevance quality of the stock price and the closing?

Of that stock prices in the long term will continue to up and down in conjunction with the performance of the company, but in the short term it will be left and right by "supply and demand relationship". And supply and demand of stock, is the point that varies depending on the speculation of market participants. Specifically, by the gap between the expected average and the reality of the market participants, stock prices will fluctuate.

For example, if a company balance sheet is in large deficit, I and many market participants are expected. But in actual earnings announcement, when deficit of the company was small much than expected, it's said to be in "bad news" but "good material". Since the deficit closing of I, but the absolute evaluation basis is no difference in negative material, it will be positive material as a relative evaluation as seen from market expectations.

In other words, news about a company is, it can not be determined by either good news or bad news only itself, whether it is a pre-woven market is how much good material, bad news is it is important. Stock prices, expected and prior market participants, I change by the relative difference between the actual announcement.

Do market participants is what expected, analysts expected the average value (aka: market consensus) will be applicable to it. Major securities companies and, at the Goldman Sachs and Morgan Stanley from investment banks, issue the expectation that what happens is earnings to earnings announcement just before the company. Deviation of the average value of their analysts and the financial results announcement, you have been involved heavily on the top and bottom of the stock price.
Analysts expected (market consensus), such as Yahoo Finance and MSN Money, has been published in each issue page of major stock information site. There is a link called "financial results and performance expected" at the bottom of the individual stocks page if Yahoo! Finance, in MSN Money on the bottom of the left menu of individual stocks page there is orchid called "evaluation and prediction", here in sales and one stock profits I find out the average value of the analysts expected such.

By the way, although there is also such as sites that give the average of forecasts of individual investors by questionnaire, or many people to answer a lie, because the first place move funds amount is less than the institutional investors, they do not have any relevance to the stock price . Importantly only, is the expected average of institutional investors.

In addition, such as PER and PBR is high growth stocks (growth stocks) is the first place that it assumes that you continue the good performance and positive earnings market is watching. So where was announced a bit of positive earnings, they are already more likely is a foldout already in stock. Such as Nintendo is a classic example, but the performance stock price plunged even better, share price at worst is performance even a little as this may result in stop depreciation.

Low PER and PBR "value stocks" on the contrary, the first place because the market is companies that do not expect a good performance, closing stock price is to not fall so much in a little bad position, at once stop high and good news even a little comes out I will be or become barrage.