A surge in new home sales that handily beat analysts’ expectations wasn’t enough to keep the markets and exchange traded funds (ETFs) solidly in positive territory this morning.
The Commerce Department reported that new home sales rose 9.6% in July, marking the fourth straight monthly increase and beating expectations, reports Alan Zibel for the Associated Press. Sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revised June rate of 395,000 and are now up 32% from the bottom in January. The news sent the iShares Dow Jones U.S. Real Estate Index (IYR) up 0.3% in morning trading.
The real estate sector was given yet another boost as the Mortgage Bankers Association reported that mortgages applications to refinance loans jumped 12.7%. This is yet another indicator that homeowners are confident that the housing market is on the mend.
In the manufacturing industry, a report indicated that a surge in the demand for aircraft pushed new orders for long-lasting U.S. manufactured goods up at their fastest pace in two years. Durable goods orders in July rose 4.9%, the largest advance since July 2007, after falling 1.3% in June. New orders for transportation equipment, including vehicles and aircraft, jumped 18.4%, while capital goods rose 9.5%, reports Elizabeth Stanton for Bloomberg.
The Office of Thrift Supervision reported that U.S. thrifts squeezed out a $4 million profit in the second quarter, marking the industry’s first positive earnings since the third quarter of 2007. Although encouraging, unfortunately, the industry is not out of the woods yet as “problem thrifts” on the agency’s list continue to increase. Thrifts having significantly low capital reserves and other deficiencies rose to 40, up from 31 last quarter and 17 a year earlier. The news sent the Regional Bank HOLDRs (RKH) up 0.8% in morning trading.
Overall, all three major U.S. indexes rose in morning trading with the Dow Jones Industrial Average adding 0.2%, the S&P 500 jumping 0.2% and the Nasdaq adding 0.1%.
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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.