Home Sales Spike, As Do Homebuilders

Homebuilders didn't benefit from Tuesday's S&P/Case-Shiller index improvements, but the Census Bureau data seemed to cause a multiplier effect.

The homebuilder spike was led by D.R. Horton(DHI), which was up 1% at mid-day, a welcome change for the stock after the pummeling it took last week on weak earnings.

Skyline(SKY) was up 4.5%; Hovnanian Enterprises(HOV) was up 2%; while KB Homes(KBH), M.D.C. Holdings(MDC), and Pulte Homes(PHM) were all trading up slightly at mid-day.

While the positive gains were small for many of the homebuilders, a broadly positive trend is welcome news for the beleaguered sector.

Only two major names in the sector were down at mid-day: The stock price of he Ryland Group(RYL) was down 0.6%; while luxury homebuilder Toll Brothers(TOL) was down 0.3%.

It was just a few weeks ago that a better-than-expected outlook from Toll Brothers sent the entire sector up.

Today, instead of leading the industry surge, Toll was missing out on it.

-- Reported by Eric Rosenbaum in New York

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