In another sign of the resilience of the bull market, the markets reacted well to news that the fragile recovery in the housing market may be vulnerable to a crisis of confidence. Housing starts dropped by a much greater-than-expected 8.5% in January, and confidence levels among homebuilders dropped for the first time in nearly a year. Still, with housing inventories continuing to fall precipitously, housing bulls are hopeful this is just a momentary lull, and investors seem to agree. As of 10:50 a.m. EST, the Dow Jones Industrials are a trifling two points below breakeven, while the broader market is moderately lower.
Among Dow stocks, Boeing led the winners with a gain of nearly 2% on reports from Reuters that the company may have found a way to solve possible problems with the batteries in its 787 Dreamliner aircraft. Boeing also got a mixed result in its ongoing labor negotiations, as its engineers approved a contract offer. Although a majority of Boeing's technical workers voted against the agreement, the odds that Boeing can avoid a strike have improved substantially at a critical time for the aircraft manufacturer.
Elsewhere, mortgage insurance companies rallied, with Radian Group rising more than 5% to hit a new two-year high and MGIC Investment soaring 7.6%. Even with today's somewhat downbeat housing news, Radian and MGIC have benefited greatly from the rising levels of activity in the housing market, as well as stronger home prices. As Fool contributor Amanda Alix noted last week, if government agencies like the Federal Housing Administration start to scale back their insurance activities, MGIC and Radian could have the opportunity to boost their business strongly to fill the void.
Finally, J. C. Penney rose almost 6% as a court case against Macy's over a brand deal with Martha Stewart Living Omnimedia should get underway today. Macy's argues that it had exclusive rights to Martha Stewart products and that Penney's partnership to open Martha Stewart mini-shops in its stores violated Macy's rights. Penney rebuts that the scope of the Macy's exclusive-rights deal is fairly limited. Amid all the courtroom drama, however, investors shouldn't lose sight of the need for Penney to execute on its overall retail strategy and become profitable again.
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The article Boeing Soars as the Dow Stalls originally appeared on Fool.com.
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