Inventories of unsold single-family homes highest level in 16 years
US Market once again fell a victim to the housing data that hit the market during morning hours today, Monday, 27 August, 2007. Weak housing data have given investors an excuse to lock in some of last week's sizable gains. The data was in contrast to last Friday's surprisingly strong gain in new home sales.
The Dow Jones Industrial Average closed lower by 56.7 points at 13,322. Tech-heavy Nasdaq dropped 15.4 points to close at 2,561. S&P 500 lost 12.6 points to close at 1,466.8.
Twenty-one out of thirty Dow stocks closed in the red today. JP Morgan Chase, GM, American Express and P&G were the main Dow laggards. Honeywell, Altria, Home-Depot, Alcoa and Boeing were the Dow winners.
The National Association of Realtors reported today that inventories of unsold single-family homes climbed 2.2% to 3.85 million in July, sending the inventory in relation to sales to the highest level in 16 years.
Altria shares today climbed 1.3% amid rising speculation that it might announce a spin-off of its international business after a meeting of the board of directors this week.
Home Depot sells its supply business for $1.8 bln less
When market opened in the morning, the indices opened in the red and lingered in the red for entire day. Biggest news for the day at that point of time was from Home Depot, which finally agreed to sell its supply business but for $1.8 bln less than the original $10.3 bln price tag.
In July, inventory of home grew because sales declined. The Realtors said existing-home sales fell 2.2% in July from June to a seasonally adjusted annual rate of 5.75 million homes. That was down 9% from July 2006 and down 28% from the average for all of 2005, when sales hit 7.08 million units.
The report also showed that the median sales price of a single-family home declined 1% from a year ago to $228,600. The median condo sales price actually rose 2.4% from a year ago to $230,600, mostly due to gains in the Northeast and Midwest.
Of the 10 sectors finishing in negative territory, Utilities paced the way and Financials turned in the next worst performance.
Among the Indian ADRs, Indian ADRs ended mixed today. Sify and ICICI Bank were the topmost gainers. Sify closed higher by 4.9% while ICICI Bank closed higher by 3.6%. Among other technology stocks, Wipro gained 2.3% while Infy lost 0.8%.
Crude soars on falling gasoline inventory
Crude oil future prices registered substantial increased today, mainly boosted by rising gasoline prices. Drop in supplies of motor gasoline for week ended 17 August in last week’s weekly inventory report was perhaps the main reason for this.
Crude-oil futures for light sweet crude for October delivery closed at $71.97/barrel (higher by $0.88/barrel or 1.2%) on the New York Mercantile Exchange.
Volume at the New York Stock Exchange totaled more than 1.1 billion shares, with declining stocks topping advancers 3 to 1. At the Nasdaq, volume came to nearly 1.4 billion shares, and decliners beat advancing stocks 9 to 5.
For tomorrow, investors will look for economic data to help set the tone of trading. The Consumer Confidence Index will hit the wires tomorrow morning at10:00 ET. The report surveys consumer attitudes toward current and developing economic conditions. Tomorrow will also feature the minutes from the 7 August FOMC (Federal Open Market Committee) meeting at 14:00 ET. The report helps provide transparency to the Fed's concerns and decisions regarding its policy.