Lackluster Housing Data Sinks Stocks
Dec 19th 2012 3:34PM
Updated Dec 19th 2012 3:36PM
Markets declined slightly in afternoon trading, given little progress on the fiscal cliff and uninspiring news from homebuilders. The National Association of Home Builders/Wells Fargo Housing Market Index rose to 47 in December from 45 in November, but that still doesn't indicate that a majority of builders feel optimistic about the market. In another report, U.S. housing starts fell 3% in November to a seasonally adjusted level of 861,000 annually. This is 22% higher than it was a year ago, so there's strong growth in the industry, but momentum may be slowing as we careen toward the fiscal cliff.
The so-so housing numbers have failed to give investors confidence in the markets, and with 30 minutes left in trading, the Dow Jones Industrial Average is down 0.42%, while the S&P 500 has fallen 0.47%.
Companies that benefit from the housing sector have been the hardest-hit today. Alcoa and Home Depot are down 3% and 1.4%, respectively, while Bank of America has slipped about 1.3%. These stocks have surged recently on the improvement in housing, and now that numbers seem to be leveling off, investors are getting concerned. I think some of the slowdown may be due to the fiscal cliff and concern about a recession, so this could be a valley before the recovery of housing gains momentum in 2013.
On the plus side, Intel rose 0.7% after agreeing to sell its stake in Clearwire . The mobile operator agreed to buy the company for $2.2 billlion, and both Intel and Comcast agreed to sell their significant stakes in the company. Now, SoftBank just needs to come through on its $20.1 billion stake in Sprint to make the rest of the acquisition complete.
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The article Lackluster Housing Data Sinks Stocks originally appeared on Fool.com.Fool contributor Travis Hoium manages an account that owns shares of Intel. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool owns shares of Bank of America and Intel. Motley Fool newsletter services recommend The Home Depot and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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