Exchange traded funds (ETFs) that invest in homebuilder stocks were higher Thursday morning after an index of pending home sales rose 5.1% in March, boosting expectations for the key spring selling season for housing.
Within the sector, Ryland Group (NYSEArca: RYL) shares fell while PulteGroup (NYSE: PHM) rallied after the builders reported quarterly results.
Ryland reported a wider first-quarter loss and said home orders fell 17%.
“For the fourth quarter of 2010 and the first quarter of 2011, there have been many instances where consensus expectations have been puzzlingly high, despite the tougher comps from the tax credit last year,” said Deutsche Bank analyst Nishu Sood. “In general we expect that orders for the builders will be down across the board in the first quarter.”
SPDR S&P Homebuilders (NYSEArca: XHB) and iShares Dow Jones US Home Construction (NYSEArca: ITB) were up fractionally in recent trading.
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