Midday Market Update: Wall Street Wavers on Earnings, Real Estate
July 27th, 2009 at 10:00am by Tom Lydon
A positive reading from the housing sector didn’t do much to invigorate stocks and exchange traded funds (ETFs) this morning, possibly because of a series of mixed earnings reports.
A government report indicated that sales of new homes rose by 11% last month, the largest amount in the last eighth years. Unfortunately, it isn’t all good news surrounding the sector. As the number of new homes sold rose, the median sales price of these homes declined by 12% to $206,200. The news sent the iShares Dow Jones U.S. Real Estate Index (IYR) up nearly 0.6% in morning trading.
In the earnings world:
- Verizon Communications (VZ) reported a decline in quarterly profits and announced that it will trim its labor force by 8,000. The communications giant reported income of $0.63/share, in line with Wall Street’s expectations.
- Among other companies reporting earnings, medical giant Aetna (AET) reported a 28% decline in profits because of higher medical expenses and cut its profit forecast for the second straight month.
- Manufacturer Honeywell (HON) reported a decline in earnings of 38% as it felt the impact of hurting automotive and construction industries.
Black gold followed the markets this morning, fluctuating between gains and losses. Most traders weighed the positive economic news from the real estate sector with lackluster earnings reports, sending light sweet crude oil to $68.99/barrel and the United States Oil Fund (USO) up 0.2% in intraday trading.
Federal Reserve Chairman Ben Bernanke stated that the nation can learn from the demise of its financial sector, the current recession and can help make the economy stronger than it was before. He emphasized that the bread and butter behind rebuilding a sound economy is consumer saving. Lastly, he said that there are signs that the economy is in recovery mode, but the process will be slow and steady. GDP will likely rise by the end of 2010, however, unemployment will most likely lag, reports David Goldman of CNN Money.
Overall the Dow Jones Industrial Average declined 0.1%, the S&P 500 gave back and the Nasdaq was down 0.3% in morning trading.
For more stories on real estate, visit our real estate category.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.