Will the Dow Salvage This Week?
|Dow Jones Industrial Average (INDEX: ^DJI)||33.26||0.25%||13,079.40|
|Nasdaq (INDEX: ^IXIC)||(1.77)||(0.06%)||3,061.55|
Source: Yahoo! Finance.
The three major indexes all opened down, with the S&P 500 poised to break its five-week run of gains. However, they have since rallied back. The Dow keeps jumping in and out of positive territory, tenuously staying above 13,000, an important psychological barrier. The Nasdaq, still in negative territory, is lagging the other two indices, but tech has outperformed every other day, leaving it the only index likely to finish with weekly gains.
As mentioned earlier, new-home sales fell sequentially to a 313,000 annual run rate, casting a pall over the sector. Shares in homebuilders have been hit hard, especially KB Home (NYS: KBH) , which is seeing a 12% decline. About the only good news from the report is that transaction prices hit an eight-month high. The existing-home sale market has shown a similar pattern, but a program by Bank of America (NYS: BAC) could make an impact if widely adopted across the industry. It allows homeowners to stay in their home as renters at below-market rates for three years after handing the title over to the bank. With fewer vacant homes and foreclosures, prices could rise and buoy the market.
And it has to be mentioned that a new Apple (NAS: AAPL) patent has imaginations running wild over the next iPhone design. The patent application highlights a case made of a "hollow glass tube," which is both an evolution of the current iPhone 4S double-sided glass design and potentially revolutionary as well. With an incredibly successful iPad release -- which saw 3 million units sold during the opening weekend -- behind us, speculation will now increase about the company's next iteration of its signature product.
There is a lot of trading left today, but after fighting off the morning's poor macro events, the Dow looks poised to finish in positive territory for the day. While that won't be enough to avoid a poor week, it will stop some of the bear chatter and hold 13,000 through the weekend.
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