How come sometimes stocks fall on positive earnings reports (ie. American Eagle today)?

Answer 1

Everything being equal, the reason may be that investors were expecting more. So this positive earnings report fell short of their expectations.

A good source to check is the analyst estimates. Above the estimates is a positive surprise, which generally leads to higher prices. On the contrary, a negative surprise is expected to lower share prices.

Of course there are other factors to watch for, such as revenue growth, CEO comments on the future, etc. in the report, but the earning/share is the most important thing people look at.

Answer 2

Even though news was good, the analysts may have been expecting even better numbers than the numbers that were released. Stocks can fluctuate alot for no reason. Sometimes rumors circulate at the Stock exchange and the stock can go up or down without the public being notified of why.

But over a long period of time, the value is determined by the corporate profits, and the view on the future.

Answer 3

Hi!
The stock market reacts to any number of factors. it's hard to pin it on one factor. Many times it is several factors..a sudden selloff..general investor unhappiness..a bad analyst report or even comment..it could have been many things.

Perhaps even with the positive sales report..many investors feel the company is not growing enough..or is not doing enough to keep up with their competitors.