EDGAR-analyzer: automating the analysis of corporate data contained in the SEC's EDGAR database
Decision Support Systems - Web retrieval and mining
Towards ubiquitous information supply for individual investors: A decision support system design
Decision Support Systems
Discovering company revenue relations from news: A network approach
Decision Support Systems
Credit Rating Change Modeling Using News and Financial Ratios
ACM Transactions on Management Information Systems (TMIS)
BizPro: Extracting and categorizing business intelligence factors from textual news articles
International Journal of Information Management: The Journal for Information Professionals
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Accounting numbers such as earnings per share are an important information source that conveys the value of firms. Previous studies on the return-earnings relation have confirmed that stock prices react to the information content in accounting numbers. However, other information sources such as financial news may also contain value-relevant information and affect investors' reaction to earnings announcements. We quantify news coverage about S&P 500 companies in the Wall Street Journal (WSJ) before earnings announcements and model its interaction with the return-earnings relation. Our empirical results show that news coverage decreases the information content of unexpected earnings and thus leads to a lower earnings response coefficient (ERC) for firms with higher news coverage. Statistically significant interaction between news coverage and unexpected earnings was observed. News coverage does not impact cumulated abnormal returns directly. We further document that this finding is not driven by firm size. The results suggest that financial news may play an important role in conveying value-related information to the markets.