NEW YORK (
) -- Most of the major homebuilding stocks traded down on Monday, but the losses were not too great for a sector that has been synonymous with volatility.
Many of the big homebuilder stocks were down between 1% and 2% at the close of trading on Monday. While the slip was in contrast to the small DJIA gain of 34 basis points and an S&P 500 gain of 38 basis points, a homebuilding slide beyond these levels is almost expected these days.
Don't go blaming Dubai, or worldwide investor fears of a hard stop to economic recovery, for a poor morning from the homebuilding sector. What's more, the news from the U.S. government that it is stepping up pressure on banks to help stem the tide of foreclosures was probably not a major mover in homebuilding shares on Monday.
All this news plays into the poor performance from the stocks, but it is the larger context for homebuilders, between now and the end of the year, that is likely to keep a lid on sector improvement.
"If you are looking at these stocks now and trying to think of what data will be coming out in December and January that will benefit the homebuilders and convince you that you need to own these names, there isn't much," said
Fox Pitt Kelton Cochran Caronia Waller
analyst Robert Stevenson.
earnings are still expected, but as the company already announced its preliminary positive outlook, its earnings are not going to provide any further bump. The whole industry received a boost from
Toll's preliminary announcement mid-November .
Toll was one of three major homebuilders up on Monday, with a gain of a little over 1%. Other homebuilders who had gains on Monday against the general downswing were
up 0.33%; and the
was down close to 2.5%;
was down 1.5%;
was down more than 2.5%; while
was down just a shade under 1.5%.
What's more, November data is not seasonally strong, and through the holiday season housing activity outside of foreclosure activity tends to drop. Most sellers do not want people traipsing through their homes during the holidays, and often even take homes off the market, so most of the transactions in December are likely to be foreclosures.
"Outperformance of the S&P will be more difficult to achieve in December than in previous months. While there are glimmers of hope on the horizon, I wouldn't expect a sustained rally from this group," FPK's Stevenson said.
-- Reported by Eric Rosenbaum in New York
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