Why the Market Can't Make up Its Mind Today
Blue-chip stocks are mixed in intraday trading following the release of disappointing housing data and downbeat quarterly results from McDonald's . With roughly an hour left in the trading session, the Dow Jones Industrial Average is up a negligible two points, while the S&P 500 is up by 0.2%.
The National Association of Realtors announced this morning that sales of previously occupied homes fell by 1.1% in June compared to May. On the flip side, the good news is that they were up by a double-digit percentage compared to the same month last year.
As NAR chief economist Lawrence Yun noted: "Affordability conditions remain favorable in most of the country, and we're still dealing with a large pent-up demand. However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market."
Fast-food giant McDonald's further fueled pessimism by reporting lackluster financial results for the three months ended June 30. While the company increased its revenue and earnings on a year-over-year basis, the market's reaction to the results shows that investors were more concerned with its 0.2% decline in June same-store sales -- for the quarter overall, the worldwide figure rose by a mere 1%.
Shares of McDonald's are down by 2.5% at the time of writing, making it the worst-performing component on the Dow this afternoon.
On the other end of the spectrum, shares of Hewlett-Packard are up by 1.6%, qualifying it for the day's best performance. Analysts at Wells Fargo said that fears over the company's exposure to the dying personal-computer industry are overdone, noting that the segment accounts for less than 10% of HP's net earnings. The megabank also noted that it expects HP's operating profit to pick up over the next fiscal year.
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John Maxfield has no position in any stocks mentioned. The Motley Fool recommends McDonald's. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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