There is good news and bad news that comes to the markets through new information that impacts expectations. News will have a differential impact, and investors should always be ready for it. Good news will drive prices higher, and of course, bad news will have the opposite effect, yet news will have a differential impact. Good news will usually be met with underreaction, while bad news, at the extreme, will be met with overreaction. To put it simply, the bad news forces investors to sell, and there has to be a buyer on the other side of the trade. To find the buyer, the markets will have to overreact to provide the buyer with a premium for considering the higher risk posed by the bad news. In the case of good news, there is no forced selling that requires new buyers. There will be a reaction, and there may be some extreme buying, but the buying excess is driven by a supply shortage, not by a need for a premium to induce buyers.
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