Why Stocks Are Heading Down Today
While stocks started out strong, headed for their third straight day of gains, they've since retreated into negative territory -- though only marginally -- following a disappointing report from the homebuilding sector released this morning. At roughly halfway through the trading day, the Dow Jones Industrial Average is down by two points, or 0.02%.
Data released from the Commerce Department today showed that housing starts, an important metric in the housing industry, decreased 3% last month from October to a seasonally adjusted annual rate of 861,000. This marks a notable hiccup in an otherwise improving sector. Last week, for example, the CEO of Hovnanian Enterprises, one of the nation's largest homebuilders, noted, "After the worst downturn that the homebuilding industry has ever seen, I do not think there is any question that the industry is finally in a period of modest recovery."
With respect to individual stocks, the biggest news concerns shipping giant FedEx and software company Oracle .
Shares of FedEx are trading higher after the company reported fiscal second-quarter earnings before the bell this morning. For the quarter, the shipping company earned $438 million, or $1.39 a share, compared to the same quarter last year, in which it earned $497 million, or $1.57 per share. According to FedEx, approximately $0.11 of the decline was caused by Superstorm Sandy, which reduced shipping volumes in the affected area. Despite the setback, FedEx's chairman and CEO Fred Smith sounded an upbeat note, saying that the company is "hard at work on another record-setting holiday shipping season, driven by the continued growth of e-commerce."
Shares of Oracle are also up following the technology company's earnings report. For the quarter, Oracle earned $0.64 per share. This represented an 18% increase over the same quarter last year and comfortably beat analyst estimates of $0.61 per share. According to Oracle's president, Mark Hurd, "Q2 performance was strong and broad based as all geographies reported double-digit revenue growth in new software license and cloud subscriptions."
On the back of this news, shares of other technology companies are trading higher, including Intel , Cisco Systems , and IBM, which are up 0.37%, 0.22%, and 0.08%, respectively, in midday trading.
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