Second Monthly Fall in U.S. New Home Sales; Apple Flash Crash

Nichole Harper
23 Mar, 2012
New York City

Stocks on Wall Street declined as global economic worries resurfaced. New home sales declined 1.6% in February and the media price increased 6.2% from a year ago. Apple stock was halted after a single trade knocked off 9% and recovered at the reopen.

[R]1:05 PM New York – Stocks on Wall Street declined as global economic worries resurfaced. New home sales declined 1.6% in February and the media price increased 6.2% from a year ago. Apple stock was halted after a single trade knocked off 9% and recovered at the reopen.[/R]

U.S. stocks trended lower as investors digest the prospect of a mild recession in the euro zone and lower economic growth in China.

With the continued rise in oil prices, investors are worried that consumer may pull back on spending and sentiment may be on the wane. Governments are also worried of the rising prospect of inflation in emerging markets.

European indexes traded lower on the renewed worries of a global economic slowdown. Investors were jittery as the euro area borders on a recession and China engineers a soft landing. In addition, bond yields in Spain and Italy were on the rise.

In Paris trading, the CAC-40 Index fell 20.81 or 0.6% to 3,451.81 and in Frankfurt the DAX Index edged lower 26.31 or 0.4% to 6.953.93.

For the week, the CAC-40 Index slumped 4% and the DAX Index declined 2.8%.

Italian 10-year bond yields climbed four basis points to 5.14%. The 10-year Spanish government bond yields rose two basis points to 5.51%.

New Home Sales Fall 1.6%

The Commerce Department said new home sales declined 1.6% last month to annual rate of 313,000 from 318,000 rate in January. The median sales price increased 6.2% in February from the year ago month to $233,700.

Existing-home sales declined to 4.59 million annual rate in February from 4.63 million pace, according to the industry association.

Stock Movers

Apple Inc dropped as much as 9% after a single trade of 100 shares at a price of $542.80 was reported on tape at 10:57 executed on the BATS Exchange platform. The price was lower from the previous trade at $598.26. Apple recovered after it reopened from the halt of thirty minutes.

Accenture plc ((ACN)) rose 51 cents to $64.03 after the Ireland based business services provider reported second quarter revenue increased 12% to $7.3 billion from $6.5 billion in the same quarter last year. Net income in the quarter increased 9.5% to $643.9 million or 97 cents per diluted share compared to $503.0 million or 75 cents per share in the year ago earlier.

New bookings for the quarter were $7.94 billion.

BATS Exchange completed public offering of 6.3 million shares priced at $16 a share that raised $101 million and opened at $15.75.

Darden Restaurants, Inc. ((DRI)) decreased 2.1% or $1.12 to $50.71 after the restaurant operator reported third quarter revenues increased 9.3% to $2.16 billion from $1.98 billion in the same quarter last year. Same restaurant sales grow 5.8%. Net earnings in the quarter increased 7% to $164.1 million or $1.25 per diluted share compared to $151.2 million or $1.08 per share in the year ago period.

Darden’s Olive Garden chain of restaurants generated $957 million, almost half of company’s revenue.

KB Home ((KBH)) declined 9.4% or $1.06 to $10.18 after the homebuilder reported first quarter revenues soared 29% to $254.6 million from $196.9 million in the same quarter last year. Net loss in the quarter narrowed to $45.8 million or 59 cents per diluted share compared to $114.5 million or $1.49 per share in the year ago quarter.

Micron Technology, Inc. ((MU)) decreased 4% or 36 cents to $8.35 after the computer memory maker reported second quarter revenue decreased to $2.07 billion from $2.26 billion in the same quarter last year. Net loss in the quarter swung to $224 million or 23 cents per diluted share compared to net income of $72 million or 7 cents per share in the year ago earlier.

Nike, Inc. ((NKE)) slipped 3.3% or $3.68 to $107.31 after the footwear and apparel maker reported third quarter revenues increased 15% to $5.85 billion from $5.08 billion in the same quarter last year. Net income in the quarter increased 7% to $560 million or $1.20 per diluted share compared to $523 million or $1.10 per share in the year ago.

Future orders for delivery from March through July increased 15% to $9.4 billion from a year ago period.