U.S. stocks and exchange traded funds (ETFs) are oscillating between positive and negative territory on a surprise drop in housing data that seems to send a signal that dashes hopes of a bottom.
Builders broke ground on the fewest homes on record in April as a plunge in work on condominiums and apartment buildings overwhelmed the second straight gain on starts on single-family properties, states Bob Willis of Bloomberg. The Commerce Department reported that housing starts slid a lower-than-expected 13%, giving hope that a housing recovery may be in sight.
As a result of the current housing slump, the largest home improvement dealer, Home Depot (HD), reported a 9.7% decline in first-quarter sales. Regardless, the company was still able to beat Wall Street’s expectations reporting earnings of $0.35/share as compared to analysts’ forecasts of $0.29/share. The SPDR S&P Homebuilders (XHB) dropped about 0.3% in intraday trading, despite being up 7.3% for the year.
The auto industry is making headlines once again. President Barack Obama plans to announce the first-ever national emissions limits for vehicles, which will require an overall fuel efficiency standard in the industry of 35.5 miles/gallon. The proposed change will combine pollution reduction with increased efficiency on the road, states Ken Thomas and Philip Elliot of the Associated Press. Additionally, the change will save billions of barrels of oil, but will cost consumers nearly an extra $1,300 per vehicle.