Markets Extend Rally in New York, New Home Sales Fall 7.3%

Nichole Harper
25 Jan, 2013
New York City

Stocks in New extended gains after a string of better than expected earnings from Procter & Gamble, Honeywell, Starbucks and Kimberly-Clark. New home sales decreased 7.3% to annual rate of 569,000 in December but rose to the highest in 2012 in three years.

[R]10:45 AM New York – Stocks in New extended gains after a string of better than expected earnings from Procter & Gamble, Honeywell, Starbucks and Kimberly-Clark. New home sales decreased 7.3% to annual rate of 569,000 in December but rose to the highest in 2012 in three years.[/R]

Financial markets are primed to open higher and market indexes are likely to advance for the eight day in a row.

New Home Sales Drop 7.3%

New home sales decreased 7.3% in December to annual rate of 369,000 units after adjusting for seasonal factors.

The Commerce Department lifted its estimate of new home sales by 220,000 to 398,000 annual rate in November, the fastest rate since April 2010.

Median home prices for a new home increased to $248,900 in December from $245,600 in November.

For all of 2012, a total of 367,000 new homes were sold, the highest since 2009 but well below the peak of sales in 2005.

Earnings Drive Positive Sentiment

The latest releases of corporate earnings and supporting economic data from the U.S. and China and Europe have lifted indexes around the world to a 2- year highs. Market indexes in the U.S. are flirting at new 5-year highs after 70% of large companies reporting earnings ahead of expectations so far.

Market indexes in Europe extended gains for the fourth day in a row after German confidence improved. The benchmark indexes in London gained 0.2% and in Frankfurt soared 1.3% and in Paris rose 0.6%.

Markets in Asia also surged after the index in Tokyo gained 2.9% and in Mumbai added 0.9%.

The index in Tokyo has rallied more than 26% in the last three months as the government works in concert with the central bank to push the yen lower and the currency reached a new 2-year low at 90.60 against one dollar.

Stocks in Review

Microsoft eased 0.8% lower after it reported quarterly profit fell 4% on slower Office sales and solid but slow launch of Windows 8 operating system. Microsoft’s online division continues to report losses and the company reported stronger sales in its operating systems segments in emerging markets.

Apple Inc edge up 0.5% after plunging 12% and the company stepped up its audit of its suppliers in Asia after discovering multiple cases of wage problems, discriminations and underage workers.

Halliburton C gained 4% after the oil well servicing company reported fourth quarter sales and earnings that were ahead of expectations on stronger growth in international markets in Middle East and Latin America.

Kimberly-Clark Corp increased 2% after the maker of hygiene products reported fourth quarter net income ahead of estimates on stronger sales in personal care division.

Tempur- Pedic soared 16% after the maker of mattresses said fourth quarter adjusted profit rose to 60 cents a share beating the estimate of 53 cents set by several analysts.

Starbucks gained 4% after the coffee house chain said net income increased to $432.2 million in the latest fiscal quarter compared to $382.1 million a year ago quarter. Comparable sales increased 7%.

Procter & Gamble gained 2% after the consumer products maker said net income more doubled to $4.06 billion in the year ending in December.