New York  London  GMT  Tokyo  Singapore 
Tom Lydon

Midday Market Update: Homebuilders And Wholesale Prices Fail To Add A Spark

By Tom Lydon on June 16, 2009 | More Posts By Tom Lydon | Author's Website

U.S. stocks and exchange traded funds (ETFs) are barely snapping a two-day losing streak to jump into positive territory as investors become a bit more optimistic that the economy is emerging from the recession.

Encouraging news from the Commerce Department about home construction added to this optimism. Construction of new homes and apartments jumped 17.2% in May to a seasonally adjusted 532,000 units, surpassing economist’s forecasts and posting the largest jump in the last three months. To add icing to the cake, applications for building permits, a good indicator for future activity, rose 4% in May to an annual rate of 518,000 units. This news sent the SPDR S&P Homebuilders (XHB) up nearly 0.7% in morning trading. It’s down 1.3% year-to-date.

More positive news came from the Labor Department, which released a report indicating that wholesale prices rose less than expected in May as a large jump in the price in gasoline offset a drop in food prices. The Producer Price Index, or PPI, rose by a seasonally adjusted rate of 0.2% from April, much lower than the 0.6% anticipated by analysts. This news put a little ease on inflation worries.

On the negative side, the Federal Reserve released a report indicating that industrial production, which includes production at the nation’s factories, mines and utilities, has tumbled by a larger than expected 1.1%, marking a seventh straight month of declines. Additionally, industrial companies idled more of their plants and equipment, resulting in an overall operating rate of 68.3%, a record low since 1967, reports Jeannine Aversa of the Associated Press. Despite the discouraging news, the Industrials Select SPDR (XLI) gained nearly 0.4% in morning trading. It’s down 1.5% year-to-date.

Consumer electronics giant Best Buy (BBY) released its first-quarter earnings and beat Wall Street’s expectations.  The company reported earnings of $0.42/share, much higher than the $0.34/share forecast by analysts.  Additionally, the company remains optimistic about the future and maintained its yearly earnings forecast.  Despite the outperformance, shares of Best Buy traded down in morning trading and the Retail HOLDRs (RTH) dropped 0.8% in morning trading; BBT is 4.2%. It’s up 4.2% year-to-date.

The Dow Jones Industrial Average jumped 0.2%, the S&P 500 added 0.4% and the Nasdsaq gained 0.7% in morning trading.

If you like this article please...
Subscribe by RSS Subscribe by Email Email This Post To A Friend Email This Post To A Friend

Leave A Comment :

Name (required)
E-mail (required - never shown publicly)
URI
Subscribe to comments via email
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.
Opinions From Our Contributors
Commodities Financials Exchange Traded Funds
Stocks Forex Economy



HEADLINES
UPCOMING EVENTS
In 1 day: NZD Visitor Arrivals (OCT)
In 1 day: AUD New Motor Vehicle Sales (MoM) (OCT)
In 1 day: AUD New Motor Vehicle Sales (YoY) (OCT)
In 1 day: JPY Supermarket Sales (YoY) (OCT)
In 1 day: CHF Money Supply M3 (YoY) (OCT)
Enter Your Email Address
Theme By: WordPress Theme Shop