Economic Data Leaves Stocks, ETFs Little Changed

December 23rd at 10:00am by Tom Lydon

ETF UpdateStocks and exchange traded funds (ETFs) were little changed this morning as weak new home sales in November put a damper on enthusiasm. Even positive figures about personal incomes and spending weren’t enough to turn the markets positive.

Personal incomes rose in November at the fastest pace in six months while spending posted a second straight increase, raising hopes that the economic recovery may be gaining momentum. Personal incomes rose by 0.4% in November, while spending rose 0.5%, reported Martin Crutsinger for the Associated Press. However, both numbers came in below expectations. This raises the question whether incomes are rising quickly enough to sustain a strong economic rebound.

Yesterday’s figures on existing home sales were upbeat, but this morning’s numbers for new homes in November was definitely downbeat. New homes sales in November plunged 11.3% to an annual rate of 355,000 – the lowest rate since April and far weaker than the 421,000 rate expected by economists, reports Kristina Peterson for MarketWatch. The SPDR S&P Homebuilders ETF (NYSEArca: XHB) is down about 1% this morning. [(For more stories on homebuilders, please visit our homebuilders category.]

Crude oil rose to a two-week high this morning at $76.40 as weekly data on U.S. stockpiles of oil showed a larger-than-expected drop. Supplies fell 4.84 million barrels to 327.5 million last week, the biggest decline since September, reports Mark Shenk for Bloomberg. This was the third consecutive weekly decline in oil inventories. [For more stories on oil, please see our oil category.]

The United States Oil Fund (NYSE: USO) which tracks the price of crude oil is up by more than 3% this morning. [For more information on commodity-based ETFs, please see our commodities ETFs category.]

Ford Motor (NYSE: F) said today that it aims to complete the sale of its loss-making Volvo Cars unit to Chinese automaker Geely in the second quarter of 2010. Geely plans to finance a bid valued around $2 billion with a combination of cash, bank loans and funds from a number of investors, report Jeff Bennett and Matthew Dolan for The Wall Street Journal. After news of the agreement, Ford’s stock traded above $10 a share for the first time since Oct. 3, 2005. [For more stories on the automotive sector, please see our automobiles category.]

Encouraging news for job-seekers: Treasury Secretary Timothy Geithner expects positive job growth to return this spring, according to the Associated Press. He also cautioned that the nation’s banks still have their work cut out for them in terms of regaining the confidence of the public.

Tony D’Altorio 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.

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