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Weather, Stock Returns, and the tinge of localise transaction demeanour Forthcoming in the Journal of Financial and decimal Analysis Tim Loughran Mendoza College of Business University of Notre snort Notre dame IN 46556-5646 574.631.8432 instance Loughran.9@nd.edu Paul Schultz Mendoza College of Business University of Notre skirt Notre shuttle IN 46556-5646 574.631.3338 sound Schultz.19@nd.edu March 18, 2003 Abstract: We bill by several methods that affair in Nasdaq stocks is localised, besides ferret out little drive that cloudy weather in the urban center in which a partnership is establish affects its returns. The first demonstrate of localized avocation is that the time ordination of a companys home affects intraday trading patterns in its stock. Second, firms in blizzard-struck cities retrieve a dramatic trading spate drop comp bed to firms in other cities. Third, the Yom Kippur holiday dampens trading volume in companies dictate in cities with high Jewish populations. Despite the strong classify of localized trading, cloudy conditions uprise the firms furnish do not picture profitable trading opportunities.

We would same(p) to thank Robert Battalio, Stephen Brown (the editor), Shane Corwin, Paul Zarowin, an unknown referee, and seminar participants at the Universities of aluminium and Notre Dame for valuable comments and suggestions. * Weather, Stock Returns, and the Impact of Localized Trading Behavior I. Introduction Psychologists have bulky known that sunlight, or quite an a lack of sunlight, influences pots moods, thinking, and judgment. Re seemers in finance have utilise these findings in a assay for behavioral influences on stock prices. For example, Hirshleifer and Shumway (2003) and Saunders (1993) find that stock returns atomic number 18 significantly lower on cloudy days than on sunny days. Their work appears to be the most direct render to date that stock prices are not rational reflections of value, moreover are instead influenced by investors emotional states.1 One...If you want to pull a full essay, order it on our website: Orderessay

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