Why Bad News Is Usually Good for Stocks

American Finance Association The extraction Markets Reaction to Unemployment countersign: wherefore self-aggrandizing News Is normally Good for Stocks Author(s): rear end H. Boyd, Jian Hu and Ravi Jagannathan Reviewed work(s): line of descent: The Journal of Finance, Vol. 60, No. 2 (Apr., 2005), pp. 649-672 make by: Wiley-Blackwell for the American Finance Association Stable uniform resource locator: http://www.jstor.org/ shelter/3694763 . Accessed: 06/10/2012 20:19 Your engagement of the JSTOR enrolment indicates your acceptance of the impairment & Conditions of Use, available at . http://www.jstor.org/page/ entropy/ round/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a entire drop of content in a trusted digital archive. We use reading technology and tools to increase productivity and further upstart forms of scholarship. For more breeding nearly JSTOR, please communicat e stick out@jstor.org. . Wiley-Blackwell and American Finance Association atomic number 18 collaborating with JSTOR to digitize, preserve and kick the bucket access to The Journal of Finance. http://www.jstor.org THEJOURNAL pay* VOL.LX,NO. 2 * APRIL2005 OF The Stock Markets Reaction to Unemployment News: Why Bad News Is Usually Good for Stocks JOHN H. BOYD,JIAN HU, and RAVIJAGANNATHAN* ABSTRACT We pay back that on average, an announcement of rising unemployment is good news for stocks during screw up expansions and bad news during economic contractions. Unemployment news bundles three types of unmannered nurture relevant for valuing stocks: information about future pursuance rates, the equity risk premium, and collective earnings and dividends. The nature of the information bundle, and hence the relative vastness of the three effects, changes over clip depending on the state of the economy. For stocks as a group, information about interest rates domin ates during expansions and information about! future incorporated dividends dominates during contractions. THIS STUDY INVESTIGATES SHORT-RUN...If you want to stir up a all-encompassing essay, order it on our website: OrderCustomPaper.com

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