NEW YORK (
Stocks in the homebuilder sector were mostly higher Monday morning, thanks to a
better-than-expected quarterly report from builder
, posted before the opening bell.
Homebuilder stocks shrugged off a tepid report from the
the National Association of Home Builders which showed its index of builder sentiment was flat month-over-month in September as high unemployment and high foreclosure rates continued to dissuade people from considering new-home purchases.
Leading the sector higher was Lennar, which jumped 8.3% in early-afternoon trading, after the company said its third-quarter earnings were $30 million, or 16 cents per share, a reversal from a year-earlier loss of $171.6 million, or 97 cents. Analysts expected a profit of $7.1 million, or 5 cents per share.
Revenue rose 14.5% to $825 million, easily beating expectations for sales of $777.5 million.
Stifel Nicolaus analyst Michael Widner noted that, based on Lennar's report, the read-through for other industry players was mixed with "the greatest positive indication for
, which is heavily concentrated in the mid-Atlantic."
The analyst said implications are negative for
, due to report its quarterly financials Friday, because of its high concentration of business in California, a market particularly hard hit by unemployment and foreclosures.
Shares of NVR added 1.2% while KB Home gained 5%.
Other sector winners included
Beazer cited slower-than-anticipated improvements in new-home orders after the
. The company said prospective homebuyers continue to exercise caution in committing to a home purchase as general economic conditions still haven't showed enough improvement.
Beazer shares were 5.4% higher with just over two hours left in the trading session while Hovnanian added 5.8%.
Bucking the trend was
, a forest products company that grows and harvests timber but is also engaged in developing real estate and constructing homes. Its shares fell 1.7% on Monday.
SPDR S&P Homebuilders
, an exchange-traded fund that tracks the sector, gained 2.6%.
-- Written by Miriam Marcus Reimer in New York.
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