Sector Snap: Homebuilders Down After Analyst Note

NEW YORK (AP) — Homebuilder stocks declined Thursday after an analyst note quashed hopes that the housing market was seeing the start of a recovery.

In a client note on Thursday, Deutsche Bank analyst Nishu Sood said disappointing quarterly results from major homebuilders in the last weeks, even after upbeat reports from KB Home and Lennar Corp., show that the housing market has yet to turn around.

"It was widely assumed that subsequent earnings reports would build upon KB and Lennar's momentum; instead, other builders results were uniformly disappointing," the analyst wrote.

Earlier this month, Pulte Homes Inc., Centex Corp. and D.R. Horton Inc. all reported narrower quarterly losses, but said they still face headwinds from falling prices, a glut of unsold homes, competition from foreclosures, tight homebuyer credit, low consumer confidence and job losses.

Toll Brothers Inc. said Wednesday its homebuilding revenue fell by about half in its second quarter and new home orders plummeted 37 percent from the same period last year. Still, it reported an increase in deposits during seven of the past nine weeks, compared with weekly figures from fiscal 2008.