U.S. Home Price Increase Accelerates, Confidence Dips

Nichole Harper
29 Jan, 2013
New York City

Market index in New York traded sideways after consumer confidence index dropped to the lowest since November 2011. Metropolitan home price index rose at the fastest pace in November in nearly six years. Hess surged after a hedge fund pushed for a breakup. Horton jumped on quarterly results.

[R]12:05 PM New York – Market index in New York traded sideways after consumer confidence index dropped to the lowest since November 2011. Metropolitan home price index rose at the fastest pace in November in nearly six years. Hess surged after a hedge fund pushed for a breakup. Horton jumped on quarterly results.[/R]

Stocks in New York retained positive momentum after the latest data on housing market and investors overlooked the decline in consumer confidence index.

Consumer sentiment index tracked by the Conference Board declined to 58.6 from a revised 66.7 in December. The index drops to the weakest since November 2011.

Metro Home Price Index Rises

The controversial S&P/Case Shiller index that tracks property values in 20 largest metropolitan markets across the U.S. increased 5.5% from a year ago in November. The increase was the fastest since August 2006.

Home price index increased 0.6% from October and the index increased the most in San Francisco and in Minneapolis.

Nineteen of the 20 cities in the index increased and the index suggested prices shot up 22.8% in Phoenix followed by 12.7% rise in San Francisco. New York City was the only city to show a decline on a month-to-moth and annual basis.

India Lowers Rate

Reserve Bank of India modestly cut interest rates first time in nine months and slashed policy rate by 25 bps each repo rate to 7.75% and capital reserve to 4%. The move is expected to add $3 billion of liquidity in the system.

Central bank also lowered its estimate of GDP growth rate to 5.7% from 6.5% in the current fiscal year.

Markets in Europe traded mixed and Germany reported better-than-expected confidence data from businesses.

Markets in Europe closed higher and indexes in London gained 0.6%, in Frankfurt and Paris added 0.1%. The IBEX 35 index declined 0.5% after European Union Commissioner Olin Rehn said budget targets for Spain could be relaxed if the Spanish economy continues to shrink.

Markets in Asia closed mixed. The Sensex index in Mumbai decreased 0.6%, in Hong Kong fell 0.1% and in Tokyo Nikkei index added 0.4%.

Stocks in Review

D.R. Horton Inc ((DHI)) soared 10% or $2.16 to $23.47 after the home builder said fiscal first quarter profit more than doubled and orders jumped 39% to 5,259 homes and contract backlog of homes surged to $1.76 billion.

EMC Corporation ((EMC)) declined 6.5% or $1.66 to $23.54 after the networked storage provider reported revenue in the fourth quarter ending in December increased 8% to $6 billion from $5.57 billion in the same period of last year. Net income in the quarter advanced 5% to $869.9 million or 39 cents per diluted share compared to $832 million or 38 cents a share a year ago earlier.

The company expects consolidated revenues for 2013 of $23.5 billion.

Ford Motor Company ((F)) slipped 6% or 81 cents to $12.97 after the automaker reported weak outlook in its European operations and issued a deteriorating outlook for the industry.

The automaker reported revenue in the fourth quarter ending in December jumped 6% to $36.5 billion from $34.6 billion in the same period of last year. Net income in the quarter plunged 88% to $1.6 billion or 40 cents per diluted share compared to $13.6 billion or $3.40 a share a year ago.

“Ford expects total profit to be about the same in 2013 as a year earlier,” said Bob Shanks chief financial officer.

Harley-Davidson ((HOG)) jumped 1.4% after the motorcycle maker reported quarterly earnings trailed expectations and shipment fell from a year ago level but revenues were ahead of expectations.

Hess Corporation ((HES)) surged 10.3% or $6.44 to $68.88 after the energy company said they received latter from Elliott Associates seeking regulatory clearance to acquire additional shares valued more than $800 million to nominate candidates for election to Hess’s Board of Directors at upcoming 2013 annual meeting.

In a separate press note, Hess said it will pursue the sale of terminal network in the U.S. and complete its exit from the refining business.

Hess plans to sell on the East Coast a total of 28 million barrels storage capacity in 19 terminals, 12 of which have deep water access and expects the transaction to release nearly $1 billion of working capital for redeployment for future growth opportunities.

Pfizer Inc. ((PFE)) increased 1.8% or 50 cents to $27.34 after the biopharmaceutical company reported revenues in the fourth quarter ending in December dropped 7% to $15.1 billion from $16.1 billion in the same period of last year. Net income in the quarter surged more than four-fold to $6.31 billion or 85 cents per diluted share compared to $1.44 billion or 19 cents a share a year ago earlier.

Pfizer said revenues in the U.S. in the quarter declined 9% and in international markets dropped 5%. Full year revenues decrease 10% to $59 billion compared to $65.3 billion and net income surged 46% to $14.6 billion from $10 billion a year ago.

Pfizer estimated 2013 financial revenue guidance in the range of $56.2 billion to $58.2 billion and adjusted diluted earnings per share between $2.20 and $2.30.

Valero Energy ((VLO)) soared 8% after the refiner reported better than expected quarterly earnings.

Yahoo! Inc. ((YHOO)) rose 1 cent to $20.32 after the internet contents provider reported revenues in the fourth quarter grew 2% to $1.35 billion from $1.32 billion in the same period of last year. Net income in the quarter declined 8% to $272.3 million or 23 cents per diluted share compared to $295.6 million or 24 cents a share a year ago earlier.

Yahoo added display revenue for the quarter fell 3% to $591 million and but search revenue increased 4% to $482 million. The number of ads for the quarter dropped approximately 10% but price-per-ad increased nearly 7%. Paid clicks increased approximately 11% while price-per-click rose 1%.

“Yahoo! exhibited revenue growth for the first time in 4 years, while the road to growth is certain, it will not be immediate"" said Marissa Mayer president and chief executive officer.