Academic study: Sunshine and stock performance linked

Financial advisers may want to invest in a Farmers' Almanac to figure out which stocks to buy. That's because it appears companies that announce earnings on sunny days in New York City see their stocks perform better than companies that do so during inclement weather, according to a recent study by two accounting professors. The study, which analyzed earnings announcements for all publicly traded companies from 1982 to 2004, found that companies that announce earnings during sunny days saw their stocks perform better than expected. This held true for companies that announced earnings that were below expectations, said John J. Shon, an assistant professor of accounting and taxation at Fordham University, and one of the authors of the study. “Those companies didn't do as badly as expected.” While the difference in performance wasn't huge — around 50 basis points — it's enough for investors and companies to pay attention to, said Mr. Shon, who worked with Ping Zhou, vice president in the quantitative investment group of Neuberger Berman LLC, on the study. “You see this phenomenon particularly with those companies that people hear about through someone as this great stock pick, but no one has heard of the company,” said Mr. Shon. The trend appeared among companies traded on the New York Stock Exchange and the American Stock Exchange, but not among those traded on the Nasdaq. “This suggests that market makers may be a contributing factor,” Mr. Shon said, noting that market makers don't work on Nasdaq. Advisers and companies shouldn't be too excited about the study's findings, however, Mr. Shon said. “This market uptick is temporary,” he said. “After a few days the market realizes that this was silly and the stock goes back to where it should be.”