News events and Price movements A multitude of event studies provide evidence for the speed with which the market really reacts. For example to companies' press releases: Patell and Wolfson(1984) demonstrate that price movements in connection with divi- dend and earnings announcements through the Dow Jones News Service set in prior to publication. The main boost in stock prices follows five to fifteen mi- nutes after the publication. Sixty to ninety minutes later, price adjustments are for the most part concluded. 8 While earnings announcements at least seem to trigger significant price movements around the publication date, the reactions to dividend announcements are weak and only worth mentioning in case of dividend changes. If price movements occur at all after dividend announce- ments, these are carried out very quickly Similar results are available for the german market: gerke. Oerke and Sentner (1997)investigate market reactions to the publication of dividend changes in business newswires and in the business paper Handelsblatt for the period from 1987 to 1994. Their findings show that stock prices react to dividend increases with abnormal returns of about one per cent on the same day; after that, there are no noticeable price fluctuations.The situation is different, however, for negative surprises: Dividend decreases and dividend omissions are responded to with immediate declines in prices, but this reaction does not stop until several days later. In addition, it is striking that a signifi- cant share of the price adjustment only happens when the information has been disseminated in the press(and not after the agency report) In many cases, the processing of information happens very quickly. Roder (2000a)comes to the conclusion that a certain type of company report,so- called ad hoc-announcements are processed very smoothly for companies listed in the DAX. After the publication date, no abnormal price movements can be established. The price reaction sets in during the first 15 minutes after publication and the major part of it is completed within the first hour of trad- ing. Stock prices of smaller companies, however, can show delayed price re actions to company news, even on the day after the publication. But these theoretical excess returns that can be observed with hindsight can hardly be realized in practice since the transactions costs exceed the potential gain Positive firm announcements, according to the results of Woodruff and Senchack(1988)on the American market, are reflected especially rapidly inNews Events and Price Movements A multitude of event studies provide evidence for the speed with which the market really reacts. For example to companies' press releases: Patell and Wolfson (1984) demonstrate that price movements in connection with divi￾dend and earnings announcements through the Dow Jones News Service set in prior to publication. The main boost in stock prices follows five to fifteen mi￾nutes after the publication. Sixty to ninety minutes later, price adjustments are for the most part concluded.28 While earnings announcements at least seem to trigger significant price movements around the publication date, the reactions to dividend announcements are weak and only worth mentioning in case of dividend changes. If price movements occur at all after dividend announce￾ments, these are carried out very quickly. Similar results are available for the German market: Gerke, Oerke and Sentner (1997) investigate market reactions to the publication of dividend changes in business newswires and in the business paper Handelsblatt for the period from 1987 to 1994. Their findings show that stock prices react to dividend increases with abnormal returns of about one per cent on the same day; after that, there are no noticeable price fluctuations.29 The situation is different, however, for negative surprises: Dividend decreases and dividend omissions are responded to with immediate declines in prices, but this reaction does not stop until several days later. In addition, it is striking that a signifi￾cant share of the price adjustment only happens when the information has been disseminated in the press (and not after the agency report). In many cases, the processing of information happens very quickly. Röder (2000a) comes to the conclusion that a certain type of company report, so￾called ad hoc-announcements, are processed very smoothly for companies listed in the DAX. After the publication date, no abnormal price movements can be established. The price reaction sets in during the first 15 minutes after publication and the major part of it is completed within the first hour of trad￾ing.30 Stock prices of smaller companies, however, can show delayed price re￾actions to company news, even on the day after the publication. But these theoretical excess returns that can be observed with hindsight can hardly be realized in practice since the transactions costs exceed the potential gain. Positive firm announcements, according to the results of Woodruff and Senchack (1988) on the American market, are reflected especially rapidly in 10