FYI: This earnings season, stocks in the Technology sector have seen quite a positive reaction from market to their earnings reports. Through Friday, stocks in the sector rallied an average of 1.26% in the first full trading session after they reported earnings, which was ahead of the 0.99% average gain for all stocks. Even as Tech stocks have been doing well, though, stocks in the internet space have had a brutal go of it this earnings season.
For stocks in the Nasdaq Internet Index that have reported earnings, the average one day change in reaction to earnings has been a decline of 0.49%. That doesn’t sound terrible until you only look at the 20 of the 41 companies that have reported and have declined on the day following their report: their average decline is 9.9%! There are some huge names in that undistinguished crowd too: S&P 500 components include Netflix (NFLX), Amazon (AMZN), Facebook (FB), eBay (EBAY), and Google (GOOGL). Those five stocks declined an average of 7.03% the day after their earnings, even though the S&P 500 has flown higher to a new all-time closing high over the last two weeks. When it comes to stock performance this earnings season, not all tech is created equal.
Regards,
Ted
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