Stocks on Wall Street Rebound on Solid Housing Market Data

Nichole Harper
26 Feb, 2013
New York City

Stocks on Wall Street rebounded after latest data on housing market showed an improvement and consumer confidence also jumped to the level last seen in November. Earnings from Home Depot and Macy

[R]11:35 AM New York – Stocks on Wall Street rebounded after latest data on housing market showed an improvement and consumer confidence also jumped to the level last seen in November. Earnings from Home Depot and Macy’s also contributed to positive sentiment.[/R]

Stocks in New York traded higher after the consumer confidence increased to the highest level since November and new home sales posted the largest monthly increase in two decades.

The new home sales increased in January by 15% from December and 30% from a year ago according to the data released by the Commerce Department today.

New home inventories declined to 4.1 month supply, the tightest supply since 2005 housing boom. The sale of new homes increased to most since July 2008, just near the peak of housing market bubble.

The controversial S&P 500 Case Shiller home price index for December increased 6.8% from a year ago. The index tracks prices in 20 largest metropolitan markets.

Home prices increased for the third quarter in a row according to the metropolitan index and prices rose 7.3% in the fourth quarter to December. Prices increased 3.6% in the third quarter and rose 1.5% in the first quarter.

Results of Italian elections reverberated around the world as investors rekindled the fears of euro zone crisis.

Markets in London, Paris and Frankfurt fell between 1.2% and 2% and indexes in Milan plunged as much as 4.6% and in Madrid dropped 3.5%.

Italian political stalemate is likely to continue as voters rejected 15 months of austerity under Prime Minister Mario Monti and failed to elect a clear winner.

Pier Luigi Bersani won the lower house with 29.5% followed closely by 29.1% votes by a coalition controlled by ex-premier Silvio Berlusconi.

Markets in Asia also declined after the preliminary results of Italian elections last evening.

Market indexes in Tokyo declined 2.3% and in Hong Kong dropped 1.3%.

Stocks in Review

AutoZone, Inc. ((AZO)) rose 7 cents to $378.61 after the automotive parts retailer said net sales in the second quarter ending in December grew 2.8% to $1.86 billion. Domestic same store sales for the quarter decreased 1.8%.

Net income in the quarter climbed 5.6% to $176.2 million or $4.78 a diluted share compared to $166.9 million or $4.15 a share a year ago earlier.

Macy’s, Inc. ((M)) jumped 3.3% or $1.29 to $39.82 after the retailer reported net sales in the fourth quarter ending on February 2 jumped 7.2% to $9.35 billion from $8.72 billion. Comparable store sales for the final quarter of 2012 increased 3.9% and online sales soared 47.7%.

Net income in the quarter fell 2% to $730 million or $1.83 a diluted share compared to $745 million or $1.74 a share a year ago.

The company expects same store sales growth in fiscal 2013 about 3.5% and earnings per diluted share in between $3.90 and $3.95.

Saks Incorporated ((SKS)) fell 4 cents to $11 after the department store retailer stated net sales in the fourth quarter ending in December surged 6% to $976.6 million. Comparable store sales increased 0.7%

Net income in the quarter plunged 45% to $20.4 million or 13 cents a diluted share compared to $37 million or 21 cents a share a year ago period.

RadioShack ((RSH)) rebounded 3% after it reported revenues declined more than expected and a fourth quarterly loss in a row.

The Home Depot, Inc ((HD)) jumped 5% to $67.11 after the home improvement retailer reported sales in the fourth quarter ending on February 3 jumped 13.9% to $18.2 billion.

Comparable store sales for the quarter climbed 7% and comp sales for U.S. stores jumped 7.1%. Net earnings in the quarter surged 32% to $1.02 billion or 68 cents a diluted share.

The retailer expects full year sales growth of nearly 2% and comparable store sales increase of about 3%. The company expects earnings to increase 12% after the anticipated share repurchase to $3.37.

The retailer also announced $17 billion stock buyback program and increased its dividend.

Vitamin Shoppe ((VSI)) plunged 19% after the online retailer reported lower than expected revenues growth in the latest quarter.

Vivus, Inc ((VVUS)) plunged 7% or 89 cents to $11.52 after the biopharmaceutical company said net loss widened more than estimated despite the three-fold increase in revenues.