What The Home Sales Numbers May Mean
Stocks were
generally lower Monday in light trading. Â Wal-Mart’s
(
WMT |
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PowerRating)
higher same-store sale forecast and record existing home sales failed to inspire
buyers. WMT lifted its August sales forecast to between 4% and 6%.
Thanks to still low interest rates, existing home sales in July rose by 5% the
highest once-month gain since 1980. On
the heels of its higher third-quarter revenue forecast, Intel fell as CEO Craig
Barrett said this weekend that “It is still too early to suggest it is a total
turnaround”. Intel shares lost 0.15
while the semiconductor index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) fell by 2.74% after hitting a
14-month high last week. The Dow broke support at 9350, its next level of support is at its 20-day average at 9256. Volume is light
today ahead of the Labor Day weekend. Bonds sold off today
after the better-than-expected existing home sales numbers.
The Dow Jones Industrial
Average
(
$INDU.X |
Quote |
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PowerRating) fell 31.23 to 9317.64. The S&P 500
(
$SPX.X |
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PowerRating)
added 0.65 to 993.71. The Nasdaq
(
$COMPQ |
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PowerRating) fell 1.01 at 1764.31.
The day’s leading sectors were
Pharmaceuticals
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), +0.70%, Banks
(
$BIX.X |
Quote |
Chart |
News |
PowerRating), +0.70%,
Internet
(
$MOX.X |
Quote |
Chart |
News |
PowerRating) +0.58%, Healthcare
(
$HCX.X |
Quote |
Chart |
News |
PowerRating),
+0.42%, Oil
(
$XOI.X |
Quote |
Chart |
News |
PowerRating), +0.28%, and Utilities
(
$UTY.X |
Quote |
Chart |
News |
PowerRating),
+0.63%.
Weak today were Disk Drives
(
$DDX.X |
Quote |
Chart |
News |
PowerRating), -2.70%, Hardware
(
$GHA.X |
Quote |
Chart |
News |
PowerRating), -1.40%, Telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating), -0.80%,
and Gold & Silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), -1.09%.
In today’s sole piece of
economic news, Existing Home sales in July jumped 5% to an annualized rate of
6.12 million vs. economist expectations of 5.9 million. This was the
third-biggest gain in four months, and the largest one-month gain since 1980.
Some analysts say this indicates a potential top in the housing market.
The 10-year U.S. Note
is -155 at 110 230.
The dollar was -0.07 at
98.93.
Gold was -1.90 at
361.70.
Crude Oil was -0.40 at
31.56.
Volume was
955,520,000 on
the NYSE, and 1,111,953,000 on the Nasdaq.
Market breadth was negative,
with NYSE declining issues over advancing issues by 1.45, and down over up
volume by 1.58. Nasdaq declining issues over advancing issues at 1.33, and down
volume over up volume at 1.49.
Top Dow stocks were:
Coca-Cola
(
KO |
Quote |
Chart |
News |
PowerRating), +0.79 at 44.07,
Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating), +0.28 at26.50, Altria Group
(
MO |
Quote |
Chart |
News |
PowerRating), +0.47
at 40.00, Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating), +0.05 at 19.40, and
Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating), +0.70 at 59.10.
Stocks in the news:
After the close, AmeriCredit
(
ACF |
Quote |
Chart |
News |
PowerRating) reported a 4Q that beat expectations by .06.
Semiconductor maker Advanced
Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating) rose after Soundview upgraded the stock
from “neutral” to “outperform”. Soundview believes that shares of AMD represent
a good risk to reward. The firm is also optimistic about AMD’s launch of its 64
bit Athlon chips. Soundview also upped its target price from $13 to $17.
Aluminum producer Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating) fell 1.20 after Prudential Securities lowered the stock’s rating
from “buy” to “hold”. The firm based the downgrade on valuation but also sees
the possibility of a slowdown in manufacturing.
Internet services firm
Infospace
(
INSP |
Quote |
Chart |
News |
PowerRating) gained 7% after a court ordered its former
founder and CEO to pay the firm $247.1 million. Naveen Jain was ordered to pay
his former firm the sum of $247.1 million for engaging in illegal “short swing”
trading.
Drug maker Biovail
(
BVF |
Quote |
Chart |
News |
PowerRating)
fell 2.47 after the Wall Street Journal reported that the U.S.
Department of Health and Human Services started a preliminary investigation into
the company’s clinical practices and marketing of its Cardizem LA drug to treat
high blood pressure. Biovail vice president of finance responded by saying “Biovail
is confident that its programs are in full compliance” and that the company will
“respond appropriately to this request for information”
Networking equipment and
software maker McData
(
MCDTA |
Quote |
Chart |
News |
PowerRating) is lower by 16% after the company
reported its latest quarterly results. The company reported second-quarter
earnings of 8 cents a share compared to a loss of 3 cents a share in the
year-ago quarter. Revenues grew 39% to $107 million but this was less than
analysts’ estimates of $108.8 million. For the third quarter, the company sees
earnings between 5 to 7 cents a share, in range of consensus estimates of 7
cents a share.
The world’s largest retailer
Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating) is fractionally higher today after the company raised its
August sales forecast from between 3% to 5% to 4% to 6%. Wal-Mart cited
stronger-than-expected back-to-school sales as well as the rollout of new Levi’s
apparel.
If you have any comments or
questions, please feel free to email me.
vincentm@tradingmarkets.com