U.S. Stocks Drift; New Home Sales Drop 11%

123jump.com Staff
24 Feb, 2010
New York City

New Home sales declined 11% in January and median home price declined to $203,500 the lowest in seven years. Fed Chairman Bernanke reiterated in his prepared remarks to lawmakers that interest rates will remain low for extended period. Stocks edge up.

[R]10:20 AM New York – New Home sales declined 11% in January and median home price declined to $203,500 the lowest in seven years. Fed Chairman Bernanke reiterated in his prepared remarks to lawmakers that interest rates will remain low for extended period. Stocks edge up.[/R]

U.S. stocks traded perked up after Fed Chairman Bernanke in his testimony reiterated that rates are likely to remain for an extended period and showed willingness to work with the regulators in auditing various programs managed by the Fed.

Bernanke assured law makers that interest rates are likely to remain low and noted that “job market remains quite weak” and nearly 40% of the unemployed have been out of work for more than six months.

The statement available on the Federal Reserve Web site noted, “Although the federal funds rate is likely to remain exceptionally low for an extended period, as the expansion matures, the Federal Reserve will at some point need to begin to tighten monetary conditions to prevent the development of inflationary pressures.”

Chairman Bernanke showed his willingness for the first time to an audit from the Government Accountability Office.

He stressed in the testimony, “In particular, we would support legislation authorizing the GAO to audit the operational integrity, collateral policies, use of third-party contractors, accounting, financial reporting, and internal controls of these special credit and liquidity facilities.”

Seasonally adjusted new home sales decreased 11.2% to 309,000 and below 6.1% from a year ago. The median sale price of new homes sold in the month was $203,500 and average price was $254,500 with 9.1 months of inventory.

Commodities traded mixed in the early trading. Crude oil increased 8 cents to $78.94 and gold decreased $7.30 to $1,095 an ounce.

Yields on 10-year U.S. Treasuries decreased to 3.69% and 30-year bonds at 4.63%.

Stock Movers

Autodesk Inc surged as much as 6% after it reported adjusted earnings in the fourth quarter of 30 cents a share.

Bowne & Co. soared 61% after it agreed to be acquired by R.R. Donnelley & Sons Co. for $481 million or $11.50 a share.

Garmin Ltd increased 2% after the navigation device makers reported adjusted fourth quarter earnings of $1.43 a share.

H&R Block Inc dropped 12% after it indicated that the company is unlikely to meet its previously guided 2010 estimate on lower than expected same-store tax filings in the first six weeks compared to a year ago.

Toll Brothers Inc increased 3% after it reported lower than expected adjusted earnings of 25 cents a share.

Earnings Review

Autodesk, Inc, the software and services company said fourth quarter revenues fell 7% to $456.1 million from $489.8 million a year ago. Net income in the quarter was $50.1 million or 21 cents per diluted share compared to net loss of $105.3 million or 47 cents per share a year ago.

Dolan Media Company, a legal newspaper publisher said fourth quarter revenues rose 18% to $69.6 million from $59.0 million a year ago. Net income in the quarter rose 138% to $8.1 million or 27 cents per diluted share compared to net income of $3.4 million or 12 cents per share a year ago.

Papa John’s International, Inc, the pizza chain said fourth quarter revenues rose 0.3% to $280.5 million from $279.6 million a year ago. Net income in the quarter rose 7% to $13.7 million or 49 cents per diluted share compared to net income of $12.8 million or 46 cents per share a year ago.

Comparable same-store sales decreased 1.4%.