Homebuilder ETFs are breaking out to the highest level since 2008 on hopes the housing market recovery is for real. They’re also getting a boost from strength in home-improvement stocks such as Home Depot (NYSE: HD).
In the broader market, the S&P 500 was set for a weekly advance of 0.7%, the Dow added 0.4% and the Nasdaq Composite rose 1.6%.
SPDR S&P Homebuilders (NYSEArca: XHB) and iShares Dow Jones US Home Construction (NYSEArca: ITB) were poised for weekly gains of more than 5% in afternoon trading Friday. Heading into the session they were up 36% and 51% year to date, respectively, according to Morningstar.
Homebuilder confidence is also improving. The National Association of Home Builders/Wells Fargo Housing Market Index rose to the highest level since February 2007, according to a report Wednesday. [Housing ETFs Build Gains; Confidence Hits Five-Year High]
Home Depot reported solid quarterly results this week and its CEO said he now sees “stabilization” in some of the nation’s hardest-hit housing markets, MarketWatch reports.
ITB, the builder ETF, has a 4.1% position in Home Depot because the fund invests in housing stocks as well as pure-play builders. [Why a Homebuilder ETF is Outperforming Its Rival]
The iShares MSCI Spain (NYSEArca: EWP) was the best-performing country ETF this week with a gain of more than 7% on speculation the European Central Bank will help shore up the troubled financial system. [Spain ETF at Summer High on Bailout Hopes]