Stocks Dive on Housing Market Weakness

Before you go, we thought you'd like these...
Before you go close icon
stock market tradersA record plunge in existing-homes sales last month sent equity investors skittering toward safety Tuesday, pushing the Dow to a triple-digit loss.

Despite bargain pricing in many regions of the country and record-low mortgage rates, the housing market remains a source of concern for investors as evidenced by Tuesday's trading. July sales of previously occupied homes dropped more than 27%, the National Association of Realtors said Tuesday. That's the sharpest monthly drop for total existing-home sales on record going back to 1999, with declines being seen in every region of the U.S., the NAR said.

The Dow Jones Industrial Average ($INDU) lost 136 points, or 1.3%, to finish at 10,039. The blue-chip index was off as much as 183 points during the session, putting it briefly below the 10,000 level.

The broader S&P 500 ($INX) fell 15 points, or 1.5%, to 1,053. The more volatile, tech-heavy Nasdaq Composite ($COMPX) shed 36 points, or 1.7%, to settle at 2,124.

In a flight to safety, bids flowed into the bond market. The yield on the benchmark 10-Year Treasury fell below 2.5% for the first time since 2009. (Bond yields move in the opposite direction of their prices.)

Seasonally adjusted existing-home sales for July came in at a 3.83-million-unit annual rate, well below economists' average estimate of 4.65 million. June existing-home sales were revised down to 5.26 million from 5.37 million.

Home resales reached a 5.66 million annual rate in May and have been sliding ever since, hurt by the end of the home-buyer tax credit on April 30.

Still, Tuesday's batch of dismal economic news is unlikely to break the market's months-long range-bound pattern, said John Stoltzfus, market strategist with Ticonderoga Securities.

"Until the market finds a catalyst or catalysts to commit to and be driven at length by -- either up or down -- we expect rallies will be bookended by sell-offs with negative to positive to negative to positive offsets driving action that grows increasingly short in duration in any one direction," Stoltzfus told clients in a Tuesday report.

Volume was once again light as many market participants are traditionally away on late August vacations. The market has been trading in a range around 1,080 on the S&P 500 since mid-May. See the chart below:

Read Full Story

Markets

S&P 500 2,386.06 -2.71 -0.11%
DJIA 20,965.67 -15.66 -0.07%
NASDAQ 6,049.81 0.87 0.01%
DAX 12,438.01 -5.78 -0.05%
NIKKEI 225 19,196.74 -55.13 -0.29%
HANG SENG 24,615.13 -83.35 -0.34%
USD (per EUR) 1.09 0.00 0.28%
USD (per CHF) 0.99 0.00 -0.06%
JPY (per USD) 111.47 0.25 0.23%
GBP (per USD) 1.29 0.01 0.42%

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Man Suspects His Wife Is Cheating On Him - Then His Daughter Reveals What's Really Going Man Suspects His Wife Is Cheating On Him - Then His Daughter Reveals What's Really Going
13 People Recount Their First Kiss Horror Stories 13 People Recount Their First Kiss Horror Stories
Large Numbers Of Horses Are Being Stuffed Into These Crates For A Despicable Reason Large Numbers Of Horses Are Being Stuffed Into These Crates For A Despicable Reason