Stocks fall after sales of existing homes decline
Stocks skidded lower Thursday after a steeper-than-expected decline in sales of existing homes wiped away some of the market's optimism about upbeat earnings reports. The major indexes each lost more than 1 percent, including the Dow Jones industrial average, which fell more than 125 points.
The National Association of Realtors said sales resumed their decline in June after a slight rebound in May. Existing home sales declined by 2.6 percent in June, well beyond the 1 percent drop economists had forecast.
The sales drop was a reminder that the housing market, and the overall economy, is still troubled in many areas. And that persuaded many stock investors to cash in some of their gains from a rally that began last week.
Investors were also absorbing a mixture of earnings reports from names like Ford Motor Co., which reported a big loss, and Dow Chemical Co., which said higher costs for raw materials sent earnings down sharply. But drug makers Bristol-Myers Squibb Co. and Eli Lilly & Co. both reported higher earnings as the weak dollar boosted foreign sales, and Amazon.com Inc. turned in a solid report that beat expectations.
Analysts have said that so far, second-quarter earnings reports have been better than many investors expected. That had lifted the market's mood in recent sessions.
Stephen Goddard, co-portfolio manager of the AFBA 5Star Balanced Fund, said the decline in housing numbers coming alongside some better-than-expected earnings reports shouldn't be surprising because mixed reports are common during economic downturns.
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Member Comments
Posted By: techresmgt @ 06/30/2008 1:53:39 PM
Comment: The media makes me laugh; this headline would lead one to believe a massive recovery of the Dow and a substantial reduction in oil. The reality is that the Dow is up a mere $34 from Friday's lows, and oil plummeted by a whopping $.064 and has settled at $140/barrel. Now that is change we can believe in.
Posted By: Karenn1 @ 06/09/2008 8:46:44 AM
Comment: Red light,yellow light drone training policy of the Republicans.Can do any thing they want. to american. They have.corruption,treason,incompetemt policy,toothless N Y,above the law practices,contitutional rape.So now were outrage .Why ,America is glutton for pushinment,vote for McCain.Israel plans to attack Iran,they seem to run are foreign policy.So who cares,gas is $4.00 a gal.
Posted By: the_shelton @ 06/06/2008 2:56:23 PM
Comment: People, it is time now to do something about this. We have known it was coming for over 35 years and we stood around with our head in the sand, buying 350 horsepower hemi's, Hummers, SUV's to haul around one kid. Well, as Sharon Stone said about China. This is our Karma. You can't avoid the problems forever, you can't pass them on to your kids.
It is here and now. Sorry, but we knew it was coming. Now is the time to go find a bus schedule and see what you can do about getting to work. Now is the time to check on the insulation on your house so your heating bills aren't out the top this winter. Now is the time to car pool and set up van pools at work. Now is the time to schedule your trips to the grocery store so they aren't for one item.
It's time..... in fact it is past time.