Sector Snap: Homebuilders

NEW YORK (AP) — Better-than-expected housing data coupled with stock price discrepancies prompted an analyst to upgrade KB Home on Monday while downgrading Standard Pacific Corp.

Buck Horne of Raymond James said in a client note that home sales are continuing to strengthen, rejuvenated by first-time buyers looking to take advantage of the government tax credit before its Dec. 1 expiration.

Horne said KB Home's stock has underperformed of late, and he lifted its rating to "market perform" from "underperform."

Shares of KB Home shed 13 cents to $18.07 in afternoon trading.

Horne lowered Standard Pacific to "underperform" from "market perform," saying the company has not been able to capitalize on the sales growth taking place in other regions of the country as the Western markets were on a slower place. Standard Pacific reported that 43 percent of its second-quarter sales came from California.

Horne is also leery of the company's 113 percent stock surge in the past seven weeks.