The Dow Jones Industrial Average fell on Tuesday as the Federal Reserve kicked off a two-day monetary policy meeting.US Marketsread more
Brent crude oil jumped the most in history in the previous session after attacks on Saudi's oil industry disrupted the kingdom's production.Marketsread more
Facebook has partnered with Ray-Ban maker Luxottica to develop augmented-reality glasses, people familiar with the matter told CNBC. The glasses, code-named 'Orion,' are being...Technologyread more
The Trump administration move on California's auto emissions standards would likely set up a fight between the White House and the state.Politicsread more
"I feel really confident that defense-minded CEOs, when they are on defense, they're going to come to" flexible offices and away from traditional leases, Knotel CEO Amol Sarva...Commercial Real Estateread more
Fanatics has hired Michener Chandlee, Nike's corporate audit and chief risk officer, to become its chief financial officer, succeeding Lauren Cooks Levitan, CNBC has learned.Retailread more
As Netflix's rivals prep for their own streaming service launches, and snatch up content belonging to their own networks, Netflix could soon face a dry well when it comes to...Entertainmentread more
"There's a huge reorganization going on in China regarding fentanyl to try to shut it down," Blackstone co-founder Stephen Schwarzman says.Health and Scienceread more
The fallout from two fatal crashes of Boeing 737 Max planes has ensnared the manufacturer's most-loyal customer: Southwest Airlines. The carrier has canceled thousands of...Airlinesread more
Pelosi also said it's "irrelevant" whether approving the USMCA trade deal would give President Donald Trump a victory ahead of the 2020 election.Politicsread more
The fine against Carmene "Zsa Zsa" DePaolo was the maximum possible civil penalty that she faced under the Hatch Act for her comments about Hillary Clinton's immigration plan...Politicsread more
Earnings are in full swing and stocks are reacting as they typically do to the good news, the bad and the mixed. But beware of the stocks that could really come under pressure on any whiff of bad news.
According to AB Bernstein, so-called crowded stocks tend to react very negatively to bad results. As widely traded stocks are usually priced for perfection, they are more vulnerable to surprises. Investors should brace for violent reactions when anything disappointing occurs, especially to those crowded names with high earnings expectations.
"One of the characteristics of crowded companies is a negative skew in reaction to news as measured by earnings revisions or surprise. The stocks don't react much to incremental positive news, while negative news has a much more pronounced effect," Bernstein's Ann Larson said in a note on Tuesday.
The other key ingredient, according to Bernstein, is finding companies with high expectations, making them much more vulnerable to a disappointment. Companies in the Bernstein screen are all expected to show profit growth of at least 10 percent.
Earnings season kicked off this week as investors digest first batch of numbers coming out of a slew of big banks. Fourth-quarter earnings are expected to be strong, with the Wall Street consensus seeing 14.7 percent growth. However, slower profit growth is on the horizon as the first-quarter earnings are expected to be up just 3.9 percent, according to Refinitiv.
Technology continues to be the most crowded sector in the S&P 500, followed by health care and utilities, according to Bernstein. On the industry level, household and personal products as well as health-care equipment and services are most crowded in the S&P 500.
— With reporting by CNBC's Michael Bloom