Dow Hit by a Drop in Pending Home Sales
U.S. stocks are moderately lower today following a reported drop in pending home sales: As of 12:45 p.m. EDT, the Dow Jones Industrial Average is down 53 points, or 0.34%, while the S&P 500 is off by 0.44% and the Nasdaq has lost 0.43%. The National Association of Realtors said sales contracts fell 0.4% during the month of June as interest rates began rising in May and housing prices continued to tick higher. Sales hit a six-year high in May and are still up more than 10% when compared to June of last year.
Bank of America is losing out today, likely because of the disappointing pending-home-sales report. Shares are down 1.4% as investors grow concerned about the bank's plan to grow revenue by increasing its mortgage business. Bank of America and the other large financial institutions have been shifting toward the mortgage business, rather than riskier forms of banking such as trading and investing. But these plans will only work if the U.S. housing market continues to improve and provide a large quantity of new home mortgages.
Boeing 's fall, on the other hand, has nothing to do with the lackluster housing report. The company has recently experienced a number of problems with its 787 Dreamliner, and it seems the drama just doesn't end. Months ago the aircraft was grounded after a number of the planes experienced problems with the new battery system. Recently, a 787 caught fire while sitting on the tarmac, and then another 787 was taken out of service after smoke was seen coming from an electrical panel. This morning the company requested that inspections be performed on all of its aircraft that use a Honeywell emergency locator beacon, as Boeing believes this may be what caused the recent incidents. Nervous investors have pushed Boeing's Stock price down 0.8% today, but year to date the shares are up more than 39%, Boeing drama and all. Given the aircraft engineering industry's massive barriers to entry and Boeing's impressive sales performance and growing backlog, investors should just sit tight and try to tune out the noise surrounding the company until clearer skies can be seen.
With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!
The article Dow Hit by a Drop in Pending Home Sales originally appeared on Fool.com.
Fool contributor Matt Thalman owns shares of Bank of America. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513. The Motley Fool recommends Bank of America, Home Depot, and Lowe's. The Motley Fool owns shares of Bank of America. 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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