On Wall Street, extreme punishments for weak profit reports

By STAN CHOE
AP Business Writer

NEW YORK (AP) — The punishment has been extreme so far this earnings reporting season when companies report profits and sales that fall short of expectations. Companies that disappoint Wall Street have seen their stocks perform 6.7 percentage points worse the next day than the overall market. That’s a much bigger hit than usual and potentially on track for a record. With just over half of all S&P 500 earnings reports now in, most have topped forecasts for either profits or sales. But the market action shows how averse investors are to disappointment when a fragile economy is threatening sales and higher costs are dragging on profitability.