U.S. Home Prices, Confidence Drop; Nokia Drops 16%

Bikram Pandey
31 May, 2011
New York City

U.S. stocks traded higher after metropolitan cities home price index declined in March. Chicago area manufacturing decelerated at the fastest pace in nearly thirty months and U.S. consumer confidence index declined. Nokia plunged 16% after it estimate weak quarterly results.

[R]10:30 AM New York – U.S. stocks traded higher after metropolitan cities home price index declined in March. Chicago area manufacturing decelerated at the fastest pace in nearly thirty months and U.S. consumer confidence index declined. Nokia plunged 16% after it estimate weak quarterly results.[/R]

U.S. Home Price Index Falls 0.8%

U.S. home prices index tracking 20 largest cities declined 0.8% in March from February. The S&P Case Shiller index dropped 3.6% from a year ago compared to 3.3% in March.

Prices in 18 of largest 20 cities declined. Minneapolis led the cities with a fall 10% followed by declines in Phoenix of 8.4%, in Chicago and Portland of 7.6% and Seattle of 7.5% and Tampa of 6.9%.

Chicago Area Manufacturing Index Decelerates

Manufacturing index in Chicago area fell to 56.6% in May, the largest decline in nearly 30-month, from 67.6% in April.

The one month decline of 11 points was the largest drop since October 2008 as manufacturers struggle with parts from Japan. The latest surge in oil prices also contributed to the slowdown in manufacturing.

Consumer Confidence Falls

U.S. consumer confidence fell to the lowest read in six months according to the data released by the Conference Board.

The index dropped to 60.80 in May from 66 in April. The expectations index with tracks the outlook of the economy six months ahead declined to 75.2 from 83.2 in April.

The number of people who said jobs are plentiful increased to 5.6% from 5.1% in the previous month and those who said jobs are hard to find rose fractionally to 43.9%.

European Markets Rise on Greece Talks

The European market indexes edged higher with the market indexes in Greece, Spain and Italy leading the region.

Greece remained the focus of bond investors as the nation hammers out agreement with the International Monetary Fund and the European Union regulators.

The sources in the European Union regulators said Greece is expected to announce austerity measures that will freeze pay of civil servants and delay new hiring for three years and cut capital expenditure plan.

In addition Greece will accelerate its privatization plan that will sell the stake in the utilities companies other government controlled assets. However, opposition party has boycotted the sale.

The International Monetary Fund is also seeking collateral from Greek government as a part of loan agreement.

Markets in Asia gained after Japan manufacturing survey showed a pre-quake level in June.

The survey of Japanese manufacturers conducted by the Trade Ministry showed that industrial out is expected to surge in June to the level near the production in February, before the March 11 earthquake.

Stock Movers

Intel Corp ((INTC)) soared 2% after the maker of computer chips promoted a new type of thin laptops and increases the competitive pressures on tablet computers.

Ashland Inc ((ASH)) soared 12% after it agreed to acquire privately held International Specialty Products Inc for $3.2 billion in cash.

Solar energy related companies traded higher after German government said it plans to exit nuclear power generation by 2022.

MEMC Electronic Materials Inc ((WFR)) rose 4% and First Solar Inc increased 2.8%. LDK Solar Co Ltd soared 9%.

Home builders declined after weaker than expected home prices in metropolitan cities.

Lennar declined 1.1%, D R Horton fell 0.8% and KB Home decreased 0.2%. NVR, Inc traded 0.3% lower.

Nokia Corp ((NOK)) dropped 17% after the mobile hand set maker said its core mobile devices and service business may just break even in the current quarter.

The company in the previous quarter generated 690 million euros of profit in the division and earned 439 million euros across all businesses.

The company also withdrew its previous guidance for the third quarter and full-year.