Markets rise on pending home sales report

Buyers are returning this week, giving more favorable reviews to the earnings reports. Dow is up 52, advancers over decliners 5-2 but NAZ is up just 4. Bank stocks are back in demand taking the Financial Index further away from the 190 floor.

S&P 500 FINANCIALS INDEX

Value 195.28

Change 1.30

% Change 0.7%

MLPs sold off earlier but are down only pennies in the 289s while the REIT Index is up 1. Junk bond funds were a little higher. Treasuries were a little weaker although the yield on the 10-year Treasury bond was flat at 3.65%.


Alerian MLP Index --- 2 weeks



Dow Jones REIT Index --- YTD








Oil has climbed above the important 75 line while gold is back above 1100, still this represents sideways trading. The 75 price for oil should correspond to about 24 on the graph.

CLH10.NYM

...Crude Oil Mar 10

...75.16

... 0.73 .......(1.0%)

GCG10.CMX...

Gold Feb 10

...1,109.50

... 5.20 .......(0.5%)

OIL (ETF) --- 6 months




GLD (ETF) --- 6 months




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Buyers of new homes rose slightly in Dec, a signal that home sales could be stabilizing heading into the spring home buying season. The National Association of Realtors said the index of sales agreements rose 1%from Nov to a Dec reading of 96.6 (a little lower than the 97.1 level expected). This index has risen for 9 out of the past 10 months as buyers scrambled to take advantage of an $8K homebuyer tax credit before expiration on Nov 30. Sales of homes, a lagging indicator, fell 17% in Dec.

•Pending Sales of Existing U.S. Homes Increase 1% Following Record Decline


% change purchase agreements - 1 year




Sales of homes - 1 year

Photo: Bloomberg




UPS (UPS), with a strong holiday shipping season & solid international business, saw its Q4 profits triple from the dismal prior year period. Profits for the final Q4 were 75¢ per share compared with 25¢ per share last year. But revenue fell 2½% to $12.4B. For 2010, UPS expects EPS to be $2.70-$3.05. Capital expenditures will total $1.8B, well below the historical range. UPS is viewed as economic bellwether. UPS Chief Financial Officer Kurt Kuehn said that Q1 "will be the most challenging of the year." UPS has been cutting costs to weather the rough patch in the economy. The stock rose 43¢ to 58.82 & held up well in last year's market sell-off.

•UPS Says First-Quarter Profit Will Be `Slightly Better' Than Year Earlier


UPS --- 2 years





DR Horton (DHI) posted a profit for the first time since 2007 in its FY Q1. The nation's 2nd-largest homebuilder said the number of new orders & completed sales increased significantly compared with Q1 last year. DHI earned 56¢ a share in Q1 ending in Dec, thanks largely to a hefty tax gain. This compares with a loss 20¢ a share last year. Revenue rose 23% to $1.1B. The number of homes sold increased 36% to 5,529, while orders increased 45% to 4,037 homes. The stock rose 1.06 (11%) after seeing a lot of selling last year.

•D.R. Horton Climbs After Builder Posts First Quarterly Profit Since 2007


DR Horton --- 2 years









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After falling 2 weeks ago, in the last week Dow has been stuck in the trenches just above 10K. Markets are greeting earnings reports with more eagerness but have been slipping in the last hour. Dec auto sales should come in the PM.

Dow Jones Industrial --- 2 weeks