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When good news is bad for stocks

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Elnur Amikishiyev | Getty Images

It's kind of weird that good news sucks, at least for some people, but that seems to be the case these days.

Take Generac, the maker of generators. It reported a 22.5 percent drop in earnings Thursday morning. It also cut its revenue outlook for the year.


Why? The company noted that "power outage severity has been well below normal." Putting that into everyday speak…it's been a light hurricane season. So power hasn't been knocked out that much and people haven't run out looking for portable power generation.

Of course you have to wonder about the observation powers of Generac investors. The stock took a big hit on the news this morning…but you couldn't predict that a revenue drop was coming based on weather reports for the last couple of months?

Then there's Genworth Financial, the life insurer. Last night it too reported lowered earnings.

Why? It had to revise its cost estimates for its long-term care insurance program. Why? When you cut through a lot of insurance-speak, it gets down to this…people are living longer, so the company ends up paying more in long-term care benefits.

Its stock is taking a 30 percent pounding. Again, you could argue that investors should have noticed people were living longer and so Genworth would be paying out more, but, hey, sometimes life catches you flatfooted.

Usually on Wall Street, it's the bad news that's considered good. A company that lays off folks, for example, usually sees a stock pop because investors take it as a sign of reduced costs and rationalization.

But for today, at least, it seems to be the other way around. Fewer hurricanes and people living longer…and a couple of stocks suffering for it.