Is that all there is? Big companies' 2nd quarter profit reports earn a big yawn from Wall Street
Stocks usually rise when companies make more in profit than analysts expected
NEW YORK (AP) — Big U.S. companies are telling investors they earned fatter profits during the spring than feared. All they're getting from Wall Street is a fat yawn.
Profits are the lifeblood of the stock market, and prices tend to track their movements over the long term. So it's routine for stocks to get a comfortable boost when companies report results for a quarter that are better than analysts expected.
Over the last five years, stocks in the S&P 500 have risen an average of 1% in the four days around a better-than-forecast profit report, from two days before to two days after, according to FactSet. But this reporting season hasn't echoed history at all.
Stocks of companies that beat profit expectations have actually seen their prices drop by an average of 0.5% over that window, according to FactSet. That's as of the end of last week, with nearly six out of seven companies in the S&P 500 having reported. That would be the worst such quarter in more than a decade.
