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Good News: Housing Sector Soars

Shares of home builders, home-improvement retailers and home-furnishers were all up on Thursday, following some good news in the sector.

Despite widening its loss in the second quarter, home builder Lennar (LEN - Get Report) reported some promising data Thursday morning.

The company posted a 47% increase in sales of completed homes and 63% jump in orders from the first quarter. Lennar also saw a 15% cancellation rate, smaller than the 22% rate in the year prior.

Revenue declined to $891.9 million, from $1.13 billion last year, but Lennar still managed to beat Wall Street's estimate of revenue of $597.5 million.

Shares of Lennar soared 17% to $9.12 in afternoon trading, and shares of other home builders followed suit. Centex (CTX) grew 6.5% to $8.64, KB Home (KBH - Get Report) spiked 8% to $14.73, Toll Brothers (TOL - Get Report) grew 5% to $17.06 and Pulte Homes (PHM) was up 6% to $9.

The momentum trickled down to home furnishers and home-improvement retailers.

Bed Bath & Beyond (BBBY - Get Report) skyrocketed 10% to $31.30 in afternoon trading, a day after reporting an unexpected gain in first-quarter earnings.

Home Depot (HD - Get Report) grew 4% to $23.59, while rival Lowe's (LOW - Get Report) also bumped up 4% to $18.86.

J.P. Morgan analyst Christopher Horvers said in a note on Thursday that both retailers are on solid ground going forward. Home Depot is working on improving its merchandise, systems and supply chain, while Lowe's is focused on fine-tuning its model.

But how long will this winning street last? Only yesterday the Commerce Department announced that new home sales in the United States slipped .6% in May to 342,000, falling short of economists' forecast. And sales of previously owned homes rose 2.4%, but also missed expectations.
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CTX $24.92 0.52%
BBBY $42.67 1.10%
HD $115.70 2.10%
KBH $10.02 4.60%
LEN $39.50 4.50%


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