Examining the Extent to Which Earnings Announcements Impact the Stock Prices of Fortune 500 Companies

Earnings announcements are a major contributing factor to the fluctuations of stock prices especially in the case of Fortune 500 companies and Magnificent 7 companies. The findings from pre-existing studies studied the influence of earnings for individual companies, and not for companies with a large market cap and the best ones in the nation, thus as a result this study will seek to analyze the influence of earnings announcements, specifically the diluted EPS surprise aspect of earnings on the stock prices of Fortune 500 companies. To assess the earnings influence on companies, data was compiled from 124 of 500 Fortune 500 companies with the use of the stocks app, and descriptive statistics were calculated upon this data such as the correlation coefficient and standard deviation. As a result, it was concluded that there is an influence from earnings on the stock price of Fortune 500 companies; however, there is extreme volatility present in the stock prices for these companies. A company's earnings can vary by a drastic range despite positive or negative earnings reports, showing that the correlation present between the earnings for Fortune 500 companies and stock prices for these companies has significant room for volatility.