CHART OF THE DAY: What happened in 2001 to make earnings reports matter more?

This chart comes from Maureen McNichols, Bill Beaver, and Zach Wang of the Stanford Graduate School of Business on how corporate earnings reports have been affecting stock price volatility after their release.  The surprise: the effect of corporate earnings releases on stock prices has increased over time – not decreased -- and the change has been dramatic since 2001.

Source: Stanford GSB Insights: utm_source=Stanford+Business&utm_medium=email&utm_campaign=Stanford-Business-Issue-73-10-18-2015&utm_content=alumni

Something changed after 2001, but it’s not clear what.  McNichols says it’s something they’ll be looking at carefully.