Stocks are broadly higher today as the Dow Jones Industrial Average is headed for its fifth straight gain this week. The blue chip index is up by 42 points, or 0.3%, at roughly halfway through the trading session.
New U.S. home sales down last month
The performance of stocks today is a particular relief in light of a downbeat report out of the housing sector. Data released this morning from the Commerce Department suggests that sales of newly constructed homes dropped last month, an unexpected blow to the still-nascent housing recovery.
According to the report, sales in December fell 7.3% to an annual pace of 369,000. The annualized figure in November stood at 398,000, and the median estimate of economists surveyed by Bloomberg came in at 385,000.
For all of 2012, an estimated 367,000 new homes changed hands, a 20% increase over 2011.
The news comes on the heels of upbeat comments from many homebuilders. In the middle of December, the CEO of Hovnanian Enterprises noted that: "After the worst downturn that the homebuilding industry has ever seen, I do not think there is any question that the industry is finally in a period of modest recovery."
This optimism was echoed by the CEO of Toll Brothers , the nation's largest builder of luxury homes: "Pent-up demand, rising home prices, low interest rates, and improving consumer confidence motivated buyers to return to the housing market in FY 2012. As household formations accelerated and unsold home inventories dropped to record lows, the industry took further steps toward a sustained housing recovery."
Following today's news, shares of Hovnanian are trading lower while shares of Toll Brothers are up.
Earnings season rolls on
Beyond new home sales, the biggest news today concerns earnings season.
Software giant Microsoft reported results for its fiscal second quarter after the closing bell yesterday. Analysts had been eagerly anticipating the results given the company's big bets last year on a redesign of its operating system and the release of its Surface tablet.
For the quarter, Microsoft earned $6.38 billion, or $0.76 per share, on $21.5 billion in revenue. While the latter figure increased 2.7% on a year-over-year basis, the former figure was down 3.7%. The results nevertheless beat the consensus estimate of $0.75 per share in earnings.
Shares of Microsoft are higher by 0.92% at roughly halfway through the day.
Consumer products giant Procter & Gamble also exceeded analysts' expectations this morning with its fiscal-second-quarter earnings. For the three months ended Dec. 31, the company earned $4.06 billion, or $1.39 per share, up from $1.69 billion, or $0.57 per share, in the same quarter in 2011 -- though much of the increase was due to a massive writedown in the comparable quarter.
The results will likely ease pressure on P&G's CEO, Bob McDonald, who's battled against activist shareholder Bill Ackman over the past year. Ackman, who built up a multibillion-dollar position in P&G last year, has been pushing the company's board to dismiss McDonald following what Ackman perceives as lackluster performance of late.
Shares of P&G are currently up by 3.6% in intraday trading.
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The article Stocks Headed for Fifth Straight Gain this Week originally appeared on Fool.com.John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble. The Motley Fool owns shares of Microsoft. 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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