Wall Street Drifts Downward
08/27/07 - 04:30 PM EDT
Robert Holmes
Updated from 4:16 p.m. EDT
Stocks in the U.S. opened the week with modest losses Monday as another report detailing the softness in the housing sector kept buyers from remaining interested. The Dow Jones Industrial Average made a brief push into the green after midday, but it ultimately closed down 56.74 points, or 0.42%, at 13,322.13. The S&P 500 was off 12.58 points, or 0.85%, to 1466.79, and the Nasdaq Composite lost 15.44 points, or 0.6%, at 2561.25. Shortly after the opening bell, the National Association of Realtors said existing-home sales dipped 0.2% to 5.75 million annualized units in July. The data came in higher than expectations but marked the lowest level of sales since November 2002. Inventories of unsold homes, meanwhile, rose 5.1%, representing a 9.6-month supply. "This [report] does not change the underlying trend, which is horrible," said Ian Shepherdson, chief economist with High Frequency Economics. "In particular, inventory continues to soar. In this environment, prices would be falling even if all was well in the mortgage market, so in today's troubled circumstances we have to expect steep declines for the foreseeable future." Housing stocks Toll Brothers (TOL Quote - Cramer on TOL - Stock Picks), Lennar (LEN Quote - Cramer on LEN - Stock Picks), Centex (CTX Quote - Cramer on CTX - Stock Picks) and Pulte Homes (PHM Quote - Cramer on PHM - Stock Picks) all finished lower by 4.5% or more. The report comes after separate data from Commerce Department on Friday showing that new-home sales unexpectedly rose 2.8% to 870,000 annualized units. Economists had expected that sales would decline 1% to 825,000 homes.
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