Magazine article USA TODAY

Sunny Days Spark Stock Market Optimism. (Investment)

Magazine article USA TODAY

Sunny Days Spark Stock Market Optimism. (Investment)

Article excerpt

When the sun is shining on Wall Street, it does more than put the brokers in a good mood--it gives a lift to the stock market. A study has found that morning sunshine at the sites of 26 leading stock exchanges around the world--including the New York Stock Exchange--is linked to positive market returns that day. The results showed that the daily difference in expected market returns between a completely overcast day and a sunny day is nine basis points (0.088%), or an annualized excess return of 24.8%.

"There's a great deal of evidence from psychology that sunshine helps put people in a good mood, and people in good moods make more optimistic choices and judgments," maintains David Hirshleifer, the Kurtz Chair in Finance at Ohio State University's Fisher College of Business, Columbus. "If people are more optimistic when the sun shines, they may be more inclined to buy stocks on sunny days." He conducted the study with Tyler Shumway, assistant professor of finance at the University of Michigan, Ann Arbor. …

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