On Friday, April 15, 2005, IBM announced that its earnings were up $22.9 billion, an increase of 3.3% over the same period a year ago. Net income was 84 cents per share compared to 79 cents a year ago. Yet, this announcement led to a 3.8% decrease in IBM stock price and was credited as the trigger for a 125 point fall in the Dow Jones Industrial Average (DJIA) that day. If the financial markets are generally efficient in pricing new information, especially about large and widely-followed firms like IBM, which of the following would best explain this?

a) Investors likely felt the good news was only temporary and not significant to the valuation of the firm.

b) Investors do not trust quarterly statements as they are often manipulated by accounting methods and frequently change materially in subsequent periods anyway.

c) Some other event pertaining to the company, unrelated to this earnings announcement, must have occurred since it clearly was good news.

d) Investors must have been expecting even better earnings news from the company than was reported and this expectation was already built into the stock's market price.

e) Investors generally pay little attention to company reports since professional analysts know the news ahead of time, and firms have incentive to window dress the numbers.