Stocks rise on housing cheer and lower oil prices

The Dow ends up 13, but the major averages fade in late trading. Apple hits new highs. August home sales climb 7.8% over July. Crude oil drops below $92. Cracker Barrel boosts guidance. Norfolk Southern issues a warning.

By Charley Blaine Sep 19, 2012 1:01PM
Charley BlaineUpdated: 6:43 p.m. ET

Stocks managed to finish modestly higher today, but the rally lost much of its energy in the last hour of trading.

The market took its queue from better-than-expected existing-home sales and a sizable drop in oil prices. In addition, the Bank of Japan surprised investors with a new campaign  to stimulate the Japanese economy. In a program similar to that announced by the Federal Reserve a week ago, the bank will buy in more than $1 trillion in bonds through the end of 2013. The Japanese moved pushed stocks in Asia and Europe higher.

The existing-home-sales report and the highest level of starts for single-family homes in two years set off a big rally in homebuilding stocks. Ryland (RYL) was up $1.73 to $31.81. PulteGroup (PHM) added 70 cents to $16.46. The stocks hit 52-week highs of $31.86 and $16.90, respectively.

Apple (AAPL) hit a new intraday high of $703.99 but fell back to $702.10. That was up 19 cents and a new closing high. Crude oil (-CL) in New York fell to as low as $91.25 a barrel before settling at $91.98, down $3.31. It was the lowest close since Aug. 3.

The Dow Jones industrials ($INDU) closed up 13 points to 13,578. The blue chips had  traded to as high as 13,626 before pulling back. The Standard & Poor's 500 Index ($INX) gained 2 points to 1,461, while the Nasdaq Composite Index ($COMPX) had risen 5 points to 3,183.

Article continues below.
The Nasdaq-100 Index ($NDX) was up 7 points to 2,864, led by Apple's gain.

The Dow is now up 12.2% from its low hit in early June. The S&P 500 is up 14.3%, with the Nasdaq up 15.8%. The rally has been just about as powerful as the rally that began Oct. 4, 2011.

That day, Federal Reserve Chairman Ben Bernanke told Congress the Fed would take action if needed to support an economy knocked about by battles between Congress and the Obama administration, the difficult jobs market and the European debt crisis.

For the year, the Dow is up 11.1%, with the S&P 500 up 16.2% and the Nasdaq up 22.2%.

A question going forward is if the rally is hitting its peak. Resistance seems to be building for the Dow at 13,600 and the S&P 500 at 1,460 to 1,467. It could be considerable, especially as the election nears, followed by the battle over the fiscal cliff -- the combination of spending cuts and expired Bush tax cuts set to expire after Dec. 31.

Thursday earnings include Oracle (ORCL), Conagra Foods (CAG) and Rite Aid (RAD). The economic reports include initial jobless claims for last week, the Philadelphia Federal Reserve Bank's September manufacturing index and the Conference Board's August report on Leading Economic Indicators. 

Futures trading suggests a flat open Thursday for stocks.

Bed Bath & Beyond, Norfolk Southern fall after hours
Shares of Bed Bath & Beyond (BBBY) and Norfolk Southern (NSC) were lower after hours.

Bed Bath & Beyond missed on earnings. Earnings for the second fiscal quarter rose from 93 cents to 98 cents a share. Revenue was up 12% to $2.59 billion. But analysts had expected $1.02 a share in earnings. The company expects 99 cents to $1.04 in earnings for the third quarter; the Street estimate is $1.02.

Shares were off $3.66 or 5.5% to $65.02 after hours. Shares had risen 40 cents to $68.79 in regular trading.

Norfolk Southern shares were off $3.84, or 5.4% to $72.69. The railroad giant said it expects to earn $1.18 to $1.25 a share in the third quarter; analysts were expecting $1.64 a share. The company earned $1.59 a year ago.

The problem is higher fuel costs and lower shipping volumes for coal and merchandise shipments. The railroad did not specify what merchandise categories were off. It gets 31% of revenue from coal. Its merchandise business includes autos, steel, aluminum chemicals, paper, lumber and paper.

Adobe Systems
(ADBE) shares were down slightly to $32.86 after hours. The company reported fiscal third-quarter net income inched higher from a year ago, matching Wall Streets' expectations. But shares dropped after its forecast was weaker than expected.

Herman Miller falls; Steelcase jumps
Shares of office furniture maker Herman Miller (MLHR) were off $1.51, or 7.4%, to $18.80 from a regular close of $20.31. The company said fiscal first-quarter profit shrank 19% as the company posted softer revenue and had fewer orders as North American demand continued to lag.

For the second quarter, the company forecast earnings of 37 cents to 41 cents a share on revenue of $445 million to $465 million. Analysts have been expecting 42 cents in earnings and revenue of $473 million.

But shares of rival Steelcase (SCS) were up 55 cents, or 5.8%, to $10.10 after the company said fiscal second-quarter earnings more than doubled as the office-furniture maker posted broad-based sales growth and posted fewer restructuring charges. The shares had closed at $$9.55 in regular trading.

Energy prices -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$91.98

$95.29

-4.65%

-6.93%
(per barrel)











Heating oil (-HO)

$3.0440

$3.1271

-4.28%

4.45%
(per gallon)











Natural gas (-NG)

$2.7620

$2.7730

-1.32%

-7.59%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8286

$2.8990

-4.85%

6.44%
(per gallon)











Brent crude 

$108.19

$112.03

-5.57%

0.75%
(per barrel)











Retail gasoline

$3.8540

$3.8590

0.65%

17.64%
(per gallon; AAA)












Saudi Arabia thinks oil prices are too high
One reason oil prices fell today was a Financial Times report that Saudi Arabia has offered to pump more oil between now and the end of the year to support global growth. The Energy Department also reported that domestic inventories were larger than expected. Energy shares were lower, but airline stocks were soaring

Crude oil's decline in New York was mirrored by a decline in Brent crude, which settled at $108.19 a barrel, down $3.84, on the Saudi news. "The current price is too high," a senior Gulf-based oil official told the newspaper. "We would like to see (Brent crude) back to $100 a barrel."

The retail price of gasoline hit $3.871 a gallon on Friday but has fallen every day since and was at 3.854 today, according to AAA's Daily Fuel Gauge Report. Higher gasoline prices are a threat to consumer spending, and the rise in gas prices last winter was a contributor to the slowing economy.

The Saudi move comes as Middle East tensions are high due to Israel's call for swift action to end Iran's nuclear program and due to the protests over a film that many Muslims believe insulted the prophet Muhammad.

Gold (-GC) settled up 50 cents to $1,771.70 an ounce. Silver (-SI) was off 13 cents to $34.588 an ounce. Copper (-HG) was up 2.7 cents to $3.814 a pound.

Interest rates were lower, with the 10-year Treasury yield at 1.78%, down from Tuesday's 1.812%.

The dollar was off slightly against the euro.

Home sales show life
Sales of existing homes rose in August to a two-year high, the National Association of Realtors said, another sign the U.S. housing market has gained traction in the second half of this year.

Sales were up 7.8% in August to 4.82 million annual rate, the National Association of Realtors said. Analysts had expected sales to increase only to a 4.56 million rate.

The national median existing-home price for all housing types was $187,400 in August, up 9.5% from a year ago. The last time there were six back-to-back monthly price increases from a year earlier was from December 2005 to May 2006.

The Commerce Department said single-family housing starts were up 5.5% from July and up 26.8% from a year ago. The 535,000 annual rate was the highest level in two years.

Multifamily starts were down slightly from July but still up 36% from  a year ago. Another report showed construction began on more single-family homes last month than at any time in the past two years.

General Mills gains from international yogurt sales
General Mills
(GIS) shares were up 71 cents to $40.11 as it benefits from its acquisition of Yoplait International. It continues, however, to struggle to expand its yogurt business at home.

The maker of Cheerios, Betty Crocker and Hamburger Helper said today its fiscal-first-quarter profit rose 35% as its purchase of Yoplait International lifted sales overseas. General Mills has licensed the brand in the U.S. since 1977 and last summer purchased a controlling stake in the company as part of its plan to focus on healthy foods and expand to other parts of the world.

The company continues to struggle to boost its stake in the rapidly growing yogurt market. General Mills said U.S. yogurt sales declined 10% in the quarter.

Corning, Cracker Barrel move higher
Corning (GLW), the world’s largest maker of glass for flat-panel televisions, rose 15 cents to $13.03 after Goldman Sachs raised its recommendation for the stock to buy from neutral.

Cracker Barrel Old Country Store (CBRL), which runs country-store-themed restaurants, added $3.69 to $67.31 after forecasting fiscal year 2013 profit of as much as $4.70 a share.

Daily-deals website Groupon (GRPN) rose 65 cents to $5.34 after announcing the launch of a payments service to provide merchants with low fees for credit-card transactions. 

Facebook (FB) jumped $1.42 to $23.29, a seven-week higher after the company said it's testing a service to place advertisements on mobile applications other than its own.

Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1100%

0.100%

22.22%

1000.00%
5-year Treasury note 

0.689%

0.699%

15.60%

-16.99%
10-year Treasury note

1.782%

1.812%

14.08%

-4.76%
30-year Treasury bond

3.032%

3.032%

12.97%

4.95%
Currencies











U.S. Dollar Index

79.127

79.346

-2.57%

-1.73%
British pound

1.6226

1.6247

2.13%

4.43%
(in U.S. $)

 








U.S. $ in pounds

£0.616

£0.615

-2.08%

-4.24%
Euro in dollars

$1.31

$1.30

3.63%

0.74%
(in U.S. $)

 








U.S. $ in euros

€ 0.766

€ 0.766

-3.50%

-0.74%
U.S. $ in yen 

78.49

78.78

0.00%

1.81%
U.S. $ in Chinese

6.33

6.31

-0.49%

0.11%
yuan











Canada dollar

$1.026

$1.026

1.20%

4.63%
(in U.S. $)

 








U.S. dollar 

$0.975

$0.974

-1.19%

-4.43%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,771.70

$1,771.20

4.98%

13.08%
(per troy ounce)

 








Copper (-HG)

$3.814

$3.787

10.33%

11.00%
(per pound)

 








Silver (-SI)

$34.5880

$34.7180

10.01%

23.90%
(per troy ounce)

 








Wheat (-ZW)

$8.8150

$8.6350

-0.90%

35.04%
(per bushel)

 








Corn (-ZC)

$7.5650

$7.400

-5.41%

17.01%
(per bushel)

 








Cotton 

$0.7641

0.7602

-1.10%

-16.66%
(per pound)

 








Coffee

$1.7440

1.775

5.86%

-24.06%
(per pound)

 








Crude oil (-CL)

$91.98

$95.29

-4.65%

-6.93%
(per barrel)










 

221Comments
Sep 19, 2012 1:49PM
avatar
Blog:

Over five thousand years ago, Moses said to the children of Israel, "Pick up
your shovels, mount your #$%$ and camels, and I will lead you to the
Promised Land."
Nearly 75 years ago, (when Welfare was introduced) Roosevelt said, "Lay down
your shovels, sit on your #$%$, and light up a Camel, this is the Promised
Land."
Today, Congress has stolen your shovel, taxed your #$%$, raised the price of
Camels and mortgaged the Promised Land!


I was so depressed last night thinking about Health Care Plans, the economy,
the wars, lost Jobs, Savings, Social Security, Retirement funds, etc. I
called a Suicide Hotline. I had to press 1 for English. I was connected to a
call center in Pakistan. I told them I was suicidal. They got excited and
asked if I have a Back Pack!!.
avatar

The National Association of Realtors got busted last year for inlating sales statistics by FIFTY percent for the previous five years in a continuing attempt to convince the public that "Now is the time to buy". 

 

After five years of flat out gross exageration why is anybody believing the NAR's statistics now without verification of their statistics from an unbiased source? 

Sep 19, 2012 2:00PM
avatar

Quote: Higher gasoline prices are a threat to consumer spending, and the rise in gas prices this past winter was a contributor to the slowing economy.

 

No sh** sherlock!!! We the American people have been telling you dumba**** this the whole time. It's sad when another country has to tell us we are charging too much for oil. That proves to us that we are getting screwed by our own country, we already knew this but now it's in the headlines from another country. Well I guess since we have a Muslim President then Saudia Arabia can help him run his country. If odumbo wants to get re-elected then drop the price of gas and food and promise to keep it down and you will see the economy explode. It's not rocket science, even a dummy like me knows this. Our leaders let's Wallstreet and others determine what we pay for things instead of listening to the ones that matter most, the American people that work every day. They can say all they want about the price of gas and oil having to be this much but they are nothing but a bunch of liars. You can't tell me things have changeda that much that quick. It all started with hurrican Katrina, they experimented with gouging us and it worked so they continue to do it today just because they can. Nobody stands up to them and makes them stop because our leaders are part of it also. This wonderful country has gone to hell in a hand basket the last few years and it will continue until we get back to the way it was when we were a God fearing country. I still don't understand why illegal immigrants want to come to this country because it's getting as bad as where they came from. We have got to take our country back people!!!!

Sep 19, 2012 1:21PM
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Bubble machine in full swing. No job recovery in everything. Let's party!!!
Sep 19, 2012 2:35PM
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Who would be stupid enough to buy a home now? Especially when layoffs are high and the economy stinks.Too risky for me.
Sep 19, 2012 1:47PM
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And people keep falling for the lies.  There is no plan to fix the major problems facing the US but plans to hit Letterman a few more times this year.  This country has turned into a disgrace. 
Sep 19, 2012 1:36PM
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More Bull.S from Fraud Street DOW UP 50 points ! Only place DOW is going is DOWN !  OFF THE CLIFF WE GO !
Sep 19, 2012 2:30PM
avatar

So, are we talking about politics again? On a article about the markets? Cool.

Here's some more differences betweens dems and reps:

Reps want to reward you for your hard work.

Dems want to reward everyone else for your hard work, and punish you with higher taxes.

Reps want to encourage prosperity, wealth creation, and equal opportunity by fostering a business-friendly environment.

Dums destroy wealth and stifle prosperity through over-regulation (in the name of "equality") and over taxation. (in the name of "the environment")

Sep 19, 2012 2:32PM
avatar

Thanks for bringing that up Eagle. I finally got a response from Harry as follows:

 

Thank you for contacting me. I appreciate hearing from you and share your support for increased transparency in the Federal Reserve.
As our nation’s central bank, the Federal Reserve plays a key role in maintaining market liquidity in a global economy, and I understand concerns over some of the Federal Reserve’s actions to stabilize the economy. Although the Federal Reserve was established in 1913 as a private lending institution to protect it from political and private pressures, its actions are subject to congressional oversight. Please be assured that I remain committed to doing all I can to ensure that the Federal Reserve continues to serve the nation and fulfill the broad goals of price stability and full employment.
I have noted your support for S. 202, Federal Reserve Transparency Act of 2011, which was introduced by Senator Rand Paul (R-TN) on January 26, 2011. This legislation seeks to abolish the Board of Governors of the Federal Reserve System and remove all Federal restrictions on auditing the central bank. S. 202 was referred to the Senate Banking, Housing, and Urban Affairs for further review. I will certainly keep your thoughts in mind should I have the opportunity to consider this or similar legislation before the full Senate.
In the meantime, you may be interested to learn that during Wall Street reform in the 111th Congress, I was pleased to support an amendment offered by Senator Bernie Sanders (I-VT) that requires the Government Accountability Office to audit the Federal Reserve’s emergency lending programs. In addition, Title XI of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) contains provisions intended to enhance transparency and accountability related to the Federal Reserve System’s emergency lending activities. I supported this measure that enforces transparency in account transactions while maintaining the independence of the Federal Reserve’s policy practices.
As an elected official, I am grateful for the public trust that the people of Nevada have assigned me and remain committed to accountability and transparency in Washington. Again, thank you for taking the time to share your thoughts with me. I will be mindful of your views as I continue my work on behalf of the people of Nevada.
My best wishes to you.
Sincerely,
HARRY REID
United States Senator
Never answered my question why he backed away from a full audit of the Fed.
Sep 19, 2012 5:20PM
avatar
Bought my first pair of prescription eye glasses last week, I got the best, progressive lenses the transition tint, flexon frames and anti glare. With my insurance it came to $1,066 dollars and I paid $444 including the exam. A friend of mine at work told me yesterday He gets the same glasses at Costco for about $300 dollars without using our insurance. It's obvious to me that Insurance companies are fleecing our nation, driving up Health Care cost, way beyond what we should be paying. This is why Americans spend double what any other nation spends on Health Care.
Sep 19, 2012 2:15PM
avatar
While the Dems sit here and complain about wall street, one of their dear leaders, Harry Reid, is working to kill the "Audit the Fed" bill.  Remember what they do --- not the sputum they call speech here.
Sep 19, 2012 2:44PM
avatar
Stocks really go up when that hopey thing gets going. Then a couple weeks ago, it was said the new housing starts were way up, now existing home sales are way up,   Damn we are in the middle of a Housing Boom   lol     Probably have 4% unemployment       Way to go dumbo
Sep 19, 2012 3:16PM
avatar
Sounds like any other Democrat trying to get office, or the leader of our once Great Nation
Sep 19, 2012 1:47PM
avatar

Charley,

 

Man you should be arrested for printing this pack of lies!

 

Here's the info straight from the horses mouth:

 

Mortgage applications for home purchases swung back lower in the September 14 week, down 4.0 percent following an 8.0 percent surge during the holiday shortened prior week. Applications for refinancing rose 1.0 percent. Mortgage rates moved mostly lower in the week including for 30-year fixed mortgages with conforming balances (under $417,500) which averaged 3.72 percent for a three basis point decline in the week and a new record low in Mortgage Bankers Association data. Watch for housing starts later this morning at 8:30 a.m. ET.

 

Expectations were not met for starts but there was a rebound in August and the mild uptrend continues. Housing starts in August advanced 2.3 percent following a 2.8 percent slip in July. The August starts pace of 0.750 million units fell short of the consensus projection of 0.768 million and is up 29.1 percent on a year-ago basis.

Sep 19, 2012 2:11PM
avatar
You can't compare SS Tax to Income tax - we all pay SS tax - and hope it comes back someday.
Sep 19, 2012 1:59PM
avatar
carl ****:"Charley,
Man you should be arrested for printing this pack of lies!
Here's the info straight from the horses mouth:
Mortgage applications for home purchases swung back lower in the September 14 week, down 4.0 percent following an 8.0 percent surge during the holiday shortened prior week. Applications for refinancing rose 1.0 percent. Mortgage rates moved mostly lower in the week including for 30-year fixed mortgages with conforming balances (under $417,500) which averaged 3.72 percent for a three basis point decline in the week and a new record low in Mortgage Bankers Association data. Watch for housing starts later this morning at 8:30 a.m. ET.

Expectations were not met for starts but there was a rebound in August and the mild uptrend continues. Housing starts in August advanced 2.3 percent following a 2.8 percent slip in July. The August starts pace of 0.750 million units fell short of the consensus projection of 0.768 million and is up 29.1 percent on a year-ago basis."


No incongruence at all. The fact that there are fewer mortgages being made means that investors are paying with all cash offers.  If you were in the trenches, like I have, you'll find that there were all cash offers being made to beat financed offers and clinch the sale. And, yes, there is that much money out there to buy with all cash offers. The investors will buy up 20-100 properties at a time and create a shortage in an area, driving up prices. Been there; done that.

Sep 19, 2012 4:16PM
avatar

I wonder how many "incompletes" are on Obama's school transcripts that he feels embarrassed to show them.

 

Maybe he just has an "honorary degree" given to him when a rich democrat or saudi contributed to a university........ maybe that is why he is ashamed to show them.  

avatar

Oh man the Bears are messing with the 5 percent gain we are suppose to get today and every day here after.

 

What sense is it for Bernanke and the Japanese and European central banks to just print trillions of fake dollars if the stock market doesn't see 5 percent gains everyday.

 

What a loser of a day today is.

 

 

Sep 19, 2012 1:53PM
avatar

home starts up when theres excessive inventory on the market for decades to come.

 

BS controlled media zombies

 

im telling every1

Sep 19, 2012 1:42PM
avatar
just in time for this criminal government to pay for their bought and paid for elections,,,next couple years they will do it again. People will lose their home equities so these criminals can keep going in their destruction of the USA. Prices up again so when it drops out, everyone pays for this criminal corporation called government deceptions. Wall street needs a new name,, Fail street since they are part of this countries FAILURE   
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