A new academic study lends credence to the idea that the "wisdom of crowds" phenomenon applies not just to encyclopedia entries and restaurant reviews, but also to stock market predictions.

Researchers from City University of Hong Kong, Purdue University and Georgia Institute of Technology found that the tone of stock market opinion blogs published on investor forum SeekingAlpha.com predicted stock returns, as well as earnings surprises, above and beyond what was evident from Wall Street analyst reports and financial...