Dow Jones Today Keeps Rising as Housing Market Slows
Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The Dow Jones Industrial Average has fought off worse than expected U.S. housing results to rise 24 points, to 16,157, as of 1:30 p.m. EST. The S&P 500 was up three points to 1,843.
The blue-chip index has been rising steadily the past few weeks and maintained its momentum this week amid a series of worrisome reports on the housing industry.
Existing Home Sales
Existing home sales dropped 5.1% in January to a seasonally adjusted annualized 4.62 million, the National Association of Realtor said this morning. That was below analyst expectations of 4.65 million.
The housing market started to cool in 2013 as higher mortgage rates and higher prices weighed on sales. Year over year the median national home price is up 10.7% to $188,900.
Terrible winter weather conditions in December and January helped to push down activity in housing, as well as across the economy as a whole. As National Association of Realtors Chief Economist Lawrence Yun said:
Disruptive and prolonged winter weather patterns across the country are impacting a wide range of economic activity, and housing is no exception. Some housing activity will be delayed until spring. At the same time, we can't ignore the ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates. These issues will hinder home sales activity until the positive factors of job growth and new supply from higher housing starts begin to make an impact.
While the economy looks like it is slowing down in the short term, the larger story is still unchanged. The stock market is overvalued, and earnings look cyclically high. That said, predicting where the broad market will go in the short term is a game for fools (with a lowercase "F"). Stocks can always get more overvalued. When things get frothy, it's worthwhile to build up some cash on the side for when prices inevitably fall.
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The article Dow Jones Today Keeps Rising as Housing Market Slows originally appeared on Fool.com.Dan Dzombakcan be found on Twitter @DanDzombakor on his Facebook page,DanDzombak. Hehas no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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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