Benchmarks finished in the green on Thursday following
better-than-expected data on the housing sector and initial
claims. These reports pushed the Standard & Poor 500 to its
highest level since December 2007. Initial claims touched its
lowest level in five years. Housing starts also touched a new
high, the previous highest level having been achieved in June
2008. The financial sector was the only loser among the S&P
500 industry groups, after two major banks reported disappointing
The Dow Jones Industrial Average (DJI) gained 0.6% to close
the day at 13,596.02. The Standard & Poor 500 (S&P 500)
added 0.6% to finish yesterday's trading session at 1,480.94. The
tech-laden Nasdaq Composite Index gained 0.6% to end at
3,136.00.The fear-gauge CBOE Volatility Index (VIX) gained 1.1%
to settle at 13.57. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.5
billion shares, marginally higher than 2012's daily average of
6.45 billion shares. Advancing stocks easily outpaced decliners
on the NYSE; as for 73% stocks that rose, only 24% moved
The U.S. Census Bureau and the Department of Housing and Urban
Development jointly reported that in December, housing starts
increased to a seasonally adjusted figure of 954,000 from the
revised November figure of 851,000. This was above the consensus
estimate of 889,000. On a year-over-ear basis, the increase was
37%. Meanwhile, building permits increased to a seasonally
adjusted figure of 903,000 from the revised November figure of
900,000. This was above the consensus estimate of 897,000. On a
year-over-year basis the increase was 29%.
Housing stocks had a good run and enjoyed decent gains
following encouraging news from housing sector. The SPDR S&P
Homebuilders (XHB) gained 1.9%. Stocks such as PulteGroup, Inc.
), Toll Brothers Inc (NYSE:
), Meritage Homes Corporation (NYSE:
), The Ryland Group, Inc. (NYSE:
) and Lennar Corporation (NYSE:
) jumped 5.3%, 3.6%, 2.1%, 2.0% and 3.5%, respectively.
Meanwhile, the U.S. Department of Labor reported that the
number of Americans filing for unemployment benefits declined to
its lowest level in five years. According to the report,
seasonally adjusted initial claims decreased 37,000 to 335,000
from the prior week's revised figure of 372,000. This was well
below the consensus estimate of 368,000.
Shares of Citigroup Inc. (NYSE:
) dropped 2.9%, after the company reported its fourth-quarter
results. The company earnings came in below the Street's
estimates. It was negatively impacted by an increase in legal
expenses. Shares of another major bank, Bank of America Corp
) dropped 4.2%. It registered better-than-expected earnings, but
its profit fell short on a year-over-year basis. Shares of eBay
) increased 2.7% on account of robust earnings and revenue.
Meanwhile, Morgan Stanley (NYSE:
) is scheduled to report its results on Friday.
Investors were hurt by disappointing results from two major
banks which pushed the financial sector into negative territory.
The Financial Select Sector SPDR (XLF) lost 0.1%. Stocks such as
JPMorgan Chase & Co. (NYSE:
), Wells Fargo & Company (NYSE:
), U.S. Bancorp (NYSE:
) and Goldman Sachs Group, Inc. (NYSE:
) slipped 0.8%, 0.2%, 1.2% and 0.1%, respectively.
Additionally, the Philadelphia branch of the Federal Reserve
reported the worsening condition of the manufacturing sector in
the mid-Atlantic region. The decline in the manufacturing sector
did not dampen investor sentiment which was boosted by housing
and the initial claims data.
BANK OF AMER CP (BAC): Free Stock Analysis
CITIGROUP INC (C): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
LENNAR CORP -A (LEN): Free Stock Analysis
MERITAGE HOMES (MTH): Free Stock Analysis
PULTE GROUP ONC (PHM): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
TOLL BROTHERS (TOL): Free Stock Analysis
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis
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