U.S. Indexes Drop to a 5-Week Low, Treasury Yields Rise

Nichole Harper
16 Aug, 2013
New York City

U.S. market indexes traded sideways and housing starts rose more than expected on a 25% surge in volatile apartment construction. Consumer confidence index declined unexpectedly. SEC approved the ICE

[R]2:45 PM New York – U.S. market indexes traded sideways and housing starts rose more than expected on a 25% surge in volatile apartment construction. Consumer confidence index declined unexpectedly. SEC approved the ICE’s takeover plan for NYSE Euronext.[/R]

U.S. stocks traded sideways and housing starts increased in July and consumer confidence index decreased.

On Wall Street, S&P 500 index decreased 0.4% or 7.11 to 1,654.21 and Nasdaq Composite Index added 0.4 to 3,606.52.

The Securities and Exchange Commission approved the IntercontinentalExchange’s takeover plan of NYSE Euronext. The approval will move deal one step closer to completion but the deal still needs approval from individual country regulators in Europe.

ICE proposed to acquire the NYSE Euronext for $8.2 billion on December 20.

Housing Starts Rise 5.9% in July

Housing starts in July increased 5.9% from June to a seasonally adjusted annual rate of 896,000 from revised June 846,000 rate, the Census Bureau and Commerce Department said today.

Single-family home starts declined 2.2% in the month to annual rate of 591,000 and dropped to an 8-month low but year-to-date total home starts are still up 24% from 2012 levels.

July’s increase in housing starts was driven by a surge in multi-family apartment construction, which soared 25.5% in the month.

Across the nation, building permits in the month, the predictor of future construction activities, increased 2.7% to 943,000 annual rate.

Confidence Index Drops

Consumer confidence index unexpectedly declined in the U.S. in August from a six-year high as consumers face higher interest rates.

Thomson Reuters/University of Michigan preliminary survey showed the index of consumer confidence declined to 80 from 85.1 in July when the index was at a high since July 2007.

A separate report from the Labor Department said U.S. workers productivity increased more than expected in the second quarter as output expanded faster than the payrolls.

U.S. Stocks in Review

Aspen Technology Inc advanced 8% after the software developer said fourth-quarter revenues increased to $83.3 million, beating the estimates of at least $78 million.

Green Mountain Coffee Roasters ((GMCR)) increased 2% after Nasdaq OMX said the company will be replace Life Technologies in Nasdaq 100 index. The switch is scheduled on August 22.

Home builders rallied after latest home construction data showed an increase largely on the account of higher multi-family apartment construction.

Pulte Group Inc soared 3%, Lennar gained 2.5% and home improvement retailer Home Depot increased 0.8%.

J.C. Penney Co. ((JCP)) decreased 2.2% and trimmed the 2-day gain of 9% ahead of retailer’s quarterly results scheduled to release on Aug 20.

Analysts estimate the second quarter sales are expected to decline as much as 6% and second quarter-loss is likely to widen as the company stabilizes its marketing plan.

Nordstrom ((JWN)) declined 3% after the luxury retailer lowered its annual earnings estimate after the close yesterday.