Stock Price Reactions to The Wall Street Journal's Securities Recommendations

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Abstract
This paper examines the impact of the "Heard-on-the-Street" (HOTS) column of The Wall Street Journal on common stock prices. The results of the study indicate that the HOTS column appears to have an impact on stock prices on the publication day; however, we also find a smaller, but statistically significant, impact on two days preceding the publication. The significant abnormal returns on these days are associated with higher trading volume. The reaction of stock prices is symmetric with respect to the buy and sell recommendations, and the impact of single-company recommendations is greater than the impact of the multi-company recommendations.

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