Below we highlight the average performance of stocks in each sector on the first trading day following earnings reports this season. Since Alcoa (AA) reported on July 8th, Financial stocks that have reported earnings have averaged a gain of 5.48% on the day. This is by far the highest of any sector and highlights that investors most likely overdid things on the downside for many banks and brokers (at least in the short term). Industrials have been the second best performing stocks on earnings, averaging a gain of 4.51% on the day. Health Care is the only other sector where stocks have averaged gains in response to earnings. Telecom, Consumer Staples, Energy and Materials have averaged the biggest declines in response to earnings reports. These are sectors that many people have expected to do well during a slowdown, and means they might have overshot to the upside leading up to this earnings season. Overall, the average US stock has averaged a gain of 1.89% on reports this earnings season.
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