Dow Jones Today Dips Slightly as Homebuilder Confidence Plunges
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 down nine points was unchanged, at 16,144, at 1:30 p.m. after a new report indicated plunging homebuilder confidence.The S&P 500 was up three points to 1,841.
There was one U.S. economic release today.
NAHB housing-market index
The National Association of Home Builders reported that its housing market index reading fell 10 points to 46 in February. Economists had expected the index to remain flat at 56.
Association Chairman Kevin Kelly highlighted a few key reasons for the steep drop in homebuilder confidence: "Significant weather conditions across most of the country led to a decline in buyer traffic last month. Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor."
Adverse weather conditions of December and January have been blamed for everything from poor earnings, to the terrible employment reports for December and January, to ugly January retail sales. Investors need to ask themselves if weather is solely to blame for the bad economic data and homebuilder confidence, or are there larger problems that are pushing down demand. One of the culprits of an economic slowdown, particularly in the housing market, has been the jump in interest and mortgage rates over the past eight months.
This jump in rates makes it harder for companies or individuals to refinance their debt and get new loans, both of which have been drivers of the economy. While companies are beginning to suffer from higher rates, one sector is benefiting: banks.
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The article Dow Jones Today Dips Slightly as Homebuilder Confidence Plunges originally appeared on Fool.com.Dan Dzombak has 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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