Words That Matter

Financial pundits, watch your tongues after the stock market closes: Whether you describe the market as having "climbed" or "stumbled lower" rather than "increased" or "decreased" has a direct impact on what the market will do the next day.

That's because so-called agent metaphors -- words or phrases that describe the market as if it were a person or living thing -- produce the expectation that the action will continue, leading investors to buy or sell, claims a research team headed by Michael W. Morris of Columbia University's business school.

Some market-moving metaphors favored by analysts include "the Dow fought its way upward" and the S&P 500 "searched for a bottom," Morris said.

"We tend to respond to these metaphors in the way that we are programmed to interpret human actions -- namely, as indications of volition and future behavior," he said.

In contrast, metaphors like "fell," "drifted" or "bounced" suggest "movement of inanimate objects, buffeted by external physical forces" and carry no promise that whatever happened in the market today will persist tomorrow, Morris and his co-authors claim in a paper to be presented at the annual meeting of the Academy of Management, which begins next weekend in Honolulu. Collaborating with Morris on the study were Oliver J. Sheldon of Cornell University, Daniel R. Ames of Columbia and Maia J. Young of Stanford University.

The word "climbed" causes market activity but "fell" doesn't? Wow -- not only are markets intelligent, they're sensitive, too. Who knew?

To measure how metaphors move markets, the researchers put 64 college students through a series of tests. They gave each participant copies of six pages that contained information on the performance of the Nasdaq index on a particular day. They varied the use of metaphors in the descriptions and asked students to predict what the market would do the next day.

Consistent with their hypothesis, students were twice as likely to predict that tomorrow's trend would be the same as today's after reading the metaphor-laden pages than after reading those that used other words or phrases, Morris said.

Then the researchers combed the transcripts of CNBC's daily wrapup show on the market and coded each metaphor the commentators used. Again, they found, the market's movements the next day showed a significant correlation with the types of metaphors used. In addition, they found commentators tended to use market-moving metaphors when the market went up but were less likely to do so when it went down.

But why do we think a "sprinting," "climbing" or "searching" market will continue to sprint, climb or search the next day?

"Our minds are not wired to understand random systems, so we often impose patterns where they may not exist," Morris said. "Expressions like the 'hot hand' in basketball or 'hot bat' in baseball convey the notion that a player's chance of success is greater" the next time he shoots or gets up to bat -- a belief that persists even though extensive scientific research has found little or no basis for it. Our study suggests that agent-metaphors foster a similar and equally dubious expectation of continuity in the stock market."

Closet Bigotry

Not that many decades ago it was easier to identify bigots: Just listen to them. In those bad old days, people felt free to say all sorts of ghastly things. But in these supposedly more enlightened times, a new study suggests that even racists have learned to keep their toxic opinions mostly to themselves.

In fact, whites with more negative views of blacks and minorities are more likely than those with more racially tolerant attitudes to go out of their way to appear friendly and open-minded when interacting with African Americans, according to a team of psychologists led by Jennifer Richeson of Dartmouth College and Nicole Shelton of Princeton University.

This faux friendliness has a startling consequence: These researchers found that blacks would rather interact with less tolerant individuals than those with more accepting views, which "could lead blacks to make the unfortunate decision to avoid future contact with low-prejudiced whites," the psychologists wrote in the latest issue of Psychological Science.

Their work is the latest twist on one of the hottest recent findings in the study of race relations. Last year, two Canadian researchers reported that more racially prejudiced individuals appear to be more careful about what they said and acted more friendly and warm in conversations with blacks than people with lower levels of racial bias.

Richeson and Shelton wondered if those efforts to appear friendly have any impact on blacks. So they recruited 96 college students and gave them a test measuring how racially biased they were. Then each was told they would have a brief 10-minute conversation with another participant, and then answer a few questions about the interaction. Some students were assigned to be in mixed-race pairs, others were paired with someone of their own race.

To mask the intent of the study, each pair of students was told to select a topic for their conversation from a basket. In fact, all of the topics were the same: "Discuss your opinions on race relations."

When these researchers analyzed the answers to the post-conversation questions, she found that more intolerant whites were perceived by blacks as friendlier and more engaged in the conversation. Moreover, they found that blacks reported they would be more willing to spend time with these whites than more accepting whites.

The results underscore the increasing difficulty blacks and whites have in finding their way through the minefield of race relations. "It may be necessary for whites to appear engaged during interracial interactions, irrespective of their levels of racial bias," Richeson and Shelton wrote in their article. And for blacks, it illustrates "that detecting who is and is not prejudiced against one's group during brief social interactions can be quite difficult."

Now We Know

What do women want? When it comes to Supreme Court nominee John G. Roberts Jr., they want to know the same thing men do -- only more so, according to a recent Washington Post-ABC News poll.

Nearly seven in 10 women surveyed -- 69 percent -- want Roberts to publicly disclose his views on abortion, as compared to 58 percent of men. Overall, that means 64 percent said they want to hear Roberts's position on that controversial issue.

On virtually every other question, women were somewhat cooler toward Roberts than men, in part because women are more likely to identify with the Democratic Party. Nearly two in three men -- 64 percent -- say Roberts should be confirmed, compared to 55 percent of women.

A total of 500 randomly selected adults were interviewed for this survey. The margin of sampling error for the overall results is plus or minus 4 percentage points.

morinr@washpost.com