U.S. New Home Sales Surge, Trade Gap Shrinks

Nichole Harper
04 Dec, 2013
New York City

U.S. new home sales surged at the fastest pace in three decades in October. A separate report showed trade gap in the month declined 5.4% to $40.6 billion on lower petroleum products deficit. Market averages declined and stocks in Europe closed lower.

[R]2:00 PM New York – U.S. new home sales surged at the fastest pace in three decades in October. A separate report showed trade gap in the month declined 5.4% to $40.6 billion on lower petroleum products deficit. Market averages declined and stocks in Europe closed lower.[/R]

Stocks turned lower as investors book solid profits ahead of the year-end and an index of service industry showed a larger than expected decline in growth.

S&P 500 index declined 0.7% to 1,782.65 and the Nasdaq Composite Index fell 0.6% to 4,012.57.

Gold increased 0.6% to 1,228 a troy ounce and recovered from a five-month low on Tuesday.

The dollar advanced against the euro and the yen and crude oil futures for the immediate month delivery increased 0.7% to $97.65 a barrel.

The service industry index declined to 53.9 in November from 55.4 in October, the Institute for Supply Management said in a research note today.

The yield on 10-year Treasury note increased to 2.82% from 2.77% on Tuesday.

In London trading, FTSE 100 index fell 0.5% or 34.39 to 6,498 and in Frankfurt the DAX index dropped 0.9% or 78.91 to 9,144.

In Paris, CAC 40 index decreased 0.9% or 35.43 to 4,137.

Retail sales in the euro zone declined 0.2% and a private survey of purchasing managers showed a slight decline in manufacturing.

The composite index of purchasing manager’s index declined to 51.7 in November from 51.9 in October. Any data above 50 shows expansion and below the mark is growth decline in the industry.

Asian markets closed mixed. Nikkei Stock Average fell 2.2% after surging to a six-year high and the yen pulled back from its six-month low.

Market indexes in Shanghai increased 1.3% after Bank of China said it plans to launch reforms for free-trade zone in Shanghai by the end of February.

U.S. Trade Deficit Shrinks

The trade deficit for October month narrowed 5.4% to $40.6 billion from upwardly revised $43 billion in September, the Commerce Department said today.

Exports increased 1.8% to $192.7 billion, on higher sale of drilling equipment and consumer goods.

Imports increased 0.4% to $233.3 billion in the month, on higher imports of toys and fuel against a decline in automobile imports.

Petroleum products trade deficit declined to $10.5 billion from $11 billion after adjusting for price inflation.

Trade gap with China shrank to $28.9 billion from $30.5 billion in September, on record U.S. exports to the second-largest economy in the world and record imports from China.

New Home Sales Surge

New home sales soared in October as buyers stepped up to bid for homes across the nation despite a rise in mortgage rates.

New home sales increased 25.4% to 444,000 annual rate in October from 354,000 rate in September. Commerce Department said today.

The monthly increase in annual rate was the largest in three decades.

The delayed report also showed September new home sales declined 6.6% from the revised 379,000 rate in August. The August month sales were previously estimated at 421,000.

The government agency reported two month sales together after the government shutdown delayed the release of monthly data in October.

U.S. Stocks in Review

J.C. Penney ((JCP)) declined 4% despite the mid-price retailer reported same store sales in November increased 10.1% from a year ago.

OmniVision Technologies plunged 4.6% after the camera sensor maker reported better-than-expected fiscal second-quarter sales and earnings and issued a weak outlook in the current quarter.