Stocks turn higher after more housing data

Construction of new US homes rises, and sales and prices of existing homes surge. Japan's central bank expands its stimulus program. Microsoft increases its dividend. General Mills beats earnings expectations.

By Melly Alazraki Sep 19, 2012 9:27AM
stock marketUpdated at 11:32 a.m. ET

Stocks turned slightly higher Wednesday after U.S. housing data continued to signal improvement. In focus is also the Bank of Japan's decision to add to stimulus measures.

The Dow Jones Industrial Average ($INDU) was up 43 points at 13,607. The S&P 500 ($INX) was up 4 points at 1,463. The Nasdaq Composite ($COMPX) was up 3 points at 3,180.

US housing
New housing data released Wednesday morning showed an improving real-estate market. Construction of new U.S. homes rose 2.3% in August to an annual rate of 750,000 as low mortgage rates and home prices propelled companies to build more. The rise, which was below the 770,000 level economists had expected, according to Briefing.com, was boosted by construction of single-family homes, which jumped 5.5% -- the fastest since April 2010.

Housing starts in July were revised down to 733,000 from an original reading of 746,000, according to Commerce Department data. Compared with August last year, residential construction was up 29.1%.

Permits, meanwhile, fell slightly in August from a multiyear high of 811,000 in July (revised down from 812,000) to an annual rate of 803,000, but not as low as economists had expected. Permits for single-family homes, however, edged up.

The Mortgage Bankers Association also said applications for home mortgages dipped last week, though demand for refinancings rose as mortgage rates fell to a record low.


Sales of existing homes surged 7.8% in August to the best level in a year, the National Association of Realtors said Wednesday. Sales rose to a seasonally adjusted annual rate of 4.82 million from July's 4.47 million, which was better than the 4.58 million economists had expected, according to Briefing.com. The level was the highest since May 2010. The median existing home price gained 9.5% year on year to $187,400.

Bank of Japan announces surprise moves
The Bank of Japan surprised markets when it said it will provide more monetary stimulus in response to a slowing in domestic economic activity. The central bank is increasing the size of its asset purchases by 10 trillion yen ($126.7 billion) to about 80 trillion yen and leaving interest rates unchanged.

The bank's decisions come on the heels of the U.S. Federal Reserve's announcement last week of additional quantitative easing, including increasing its own asset-purchase program.


Stocks in Tokyo jumped, with the Nikkei Stock Average rallying 1.2% as the yen weakened. In general, Asian markets closed higher Wednesday as the BOJ's move offset some of the concern over Japan and China territorial dispute.


European stock markets, however, struggled for direction despite the unexpected easing measures from Japan.

Gold and other precious metals traded at levels not seen since early this year after the Bank of Japan's surprise move. Gold for December delivery rose $4.10, or 0.2%, to $1,775.30 an ounce, levels not seen since late February.

Stocks to watch
Microsoft's (MSFT) board approved a 15% increase in the software giant's quarterly dividend to 23 cents share. The new dividend is payable Dec. 13 to stockholders of record on Nov. 15. Microsoft also announced that Ray Gilmartin will no longer be a member of the board, which will have 10 members, including CEO Steve Ballmer and co-founder and Chairman Bill Gates. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

Samsung Electronics failed to overturn a temporary sales ban on its tablet computer, the Galaxy Tab 10.1, in the U.S. market. A California court dismissed the South Korean company's appeal against Apple (AAPL).

Groupon (GRPN) shares surged after the online daily deal site launched Groupon Payments, a new mobile payments service for the iPhone and the iPod Touch. The system will give businesses the ability to take all credit card payments at a lower rate than other providers.

Yahoo (YHOO) announced Tuesday that it will return to shareholders most of the proceeds, or about $3 billion, from the sale of a portion of its stake in China's Alibaba.

General Mills (GIS) shares advanced after the food producer reported quarterly earnings of 66 cents per share, slightly beating expectations for 62 cents a share.

AutoZone (AZO) reported better-than-expected earnings, but same-store sales fell below forecasts.

187Comments
Sep 19, 2012 10:03AM
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hmmm....

Helicopter Ben is going to print 40 Billion a month.  That is 480 Billion for the year.   That works out to $120/person/month, or $480/family of four per month.

Rather than print that money and give it to "57 States" to piss away, why not send it DIRECT to each person.   Can't you spend Helicopter Ben's money better than Obama?

Oh, you are a democrat and too stupid to spend your money?  And you need Obama to spend it for you?    YOU ARE THE PROBLEM....
Sep 19, 2012 10:01AM
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I'm trying to understand Obama. Can anyone tell me what jobs he had as younger man?
Sep 19, 2012 9:59AM
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And now a 1998 Obama speech surfaces... two can play that game...  

"I am a firm believer in wealth redistribution..."  

I guess his true SOCIALIST beliefs are surfacing.   No wonder he has been so careful to hide his past and seal all his records at every level.

Not as good as some of his other lines...  
"57 States"
"Polish Death Camps" So insulting the Polish government DEMANDED an apology...
"Marine Corpsmen are the best undertakers in the world"  and he mispronounced corpsmen...
"The private sector is doing fine"...  CLUELESS
"You didn't build that"...  And the rest of his speech denigrating builders of small business...

Obama makes W look like a Rhodes Scholar!   Truly, stupid, lazy, clueless and CORRUPT.
Sep 19, 2012 11:29AM
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I'm starting to notice an interesting trend:

More and more people on BOTH the left and right are saying that government - both main political parties, are bought and sold and not representing them, and most don't trust Wall Street or large financial institutions.

And we awake.



Sep 19, 2012 9:41AM
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interesting read on one of the other articles here.  nice demographic breakdown of that "47%"

 

>>>Half avoid taxes, get US help, but many not poor<<<
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Yea -- Japan is printing fake monies

            USA is printing fake monies

            ECB is printing fake monies

 

The Federal Reserve is buying US mortgages freeing up investor capital to buy more new houses which will create another housing asset bubble with no one to buy the houses as 30 million workers have left the labor pool and those that are left have lost 10 percent of their wages.

 

Yep we are headed towards a complete and total melt down of our economies.

 

Even the Russians say they don't want our money as it is no good anymore. Putin just said no to about $1 billion in US aid money.

 

 

Sep 19, 2012 12:31PM
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Romney was right, there are many victims in our society today.  Probably not 47%, but

a pretty high percentage.  It will reach 47% before long and climb much higher if

something isn't done about the root problem.  Sadly the roots of this problem already

run very deep and are spread very wide.  And over the past 3 decades we have been

watering and fertilizing these root very heavily.

 

So what are our root problems.

 

First and foremost is politics and the politicans that attempt to operate our political system.

Waste, Fraud, greed and corruption have finally taken over the system almost completely and made a mockery of what used to be at least a semi functional system of government.

 

Second is the constant struggle between the political system and the private sector to

control our economy and society.  Unfortunately neither is winning.  The private sector

has its failing as well.  Fraud, greed, and corruption flurish in that sector to.  Of course they want

to blame the government for thier failures and  congatulate themselves on their

successes.   The private sector can no longer generate enough jobs, especially living

wage jobs.  Why, because the have moved the good job base, manufacturing, overseas.

We are no a retail and service economy and those jobs are low pay with few benefits.

 

It is imperative that the two sectors work together to right the economic and social ship.

This cooperation must start soon or the ship is going to sink.  We have assumed that

our ship was unsinkable, buy they thought that about the Titanic and look where it ended up.

 

The waste, fraud, and corruption iceberg that permeates both sectors is growing and

is now directly in the path of our ship of state and the lookouts have seemed to turn a blind

eye to the peril ahead and the radar is broken. 

 

The main problem is that the last economic bust has left us with far to few lifeboats to save

the millions of people that will be thrust into sea when the ship hits the iceberg.

 

 

 

 

 

 

 

 

 

Sep 19, 2012 11:48AM
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By not addressing the fundimentals, a stimulous created housing bubble is a recipe for poison soup. It may taste great going down, but in the end it will kill you.
Sep 19, 2012 11:11AM
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Prior to the mid 70's Americans shared the livable wage concept.  This concept was that every job; even the most basic entry level job, would provide that worker enough income to eat, have a roof over his head, and dream of a better future.  One of the first corporations to discharge this value was McDonalds.  This corporation set up hiring practices whereby they hired the very young; whose parents supplied the basic needs, and these youngsters worked for experience and entertainment money. Thus the race to the bottom ensued. Everyone still had an opportunity to work as hard as they wanted but their basic survival needs were easily met.  Through trade and immigration policy changes initiated by Politicians willing to "sell" their influence this bar has been continuosly raised. It is my contention we have lost a percentage of citizens; who for all calculations will be unable to meet their most basic needs, already.  In no uncertain terms I contend if we initiated trade restriction, duties, and enforced  present immigration laws we would see factories, manufacturing, and small businesses  spring up on every block. The tax base would immediately be envigorated and we would once again reignite the AMERICAN dream.   Why tell me why do our elected officials hate America so much?
Sep 19, 2012 11:21AM
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NTU wrote: I contend if we initiated trade restriction, duties, and enforced  present immigration laws we would see factories, manufacturing, and small businesses  spring up on every block. The tax base would immediately be envigorated and we would once again reignite the AMERICAN dream.   Why tell me why do our elected officials hate America so much?

 

They don't hate America, NTU, they look upon their time in office as their opportunity to enrich themselves to the point of gluttony. This is their American Dream; get elected, get rich, get powerful and live the life of a Mafia Don forevermore. Workable solutions for the betterment of our country  have no appeal to these pirranahs.  

 
 
 
 
 
Sep 19, 2012 9:43AM
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Housing starts and the economy are in the TOILET and going down ! TAKE YOUR MONEY AND RUN  !  SELL SELL SELL !
Sep 19, 2012 10:55AM
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Mirrage Guy

I had the same proposal last week, I posted it and many Repubs Sh!t on it saying it wouldn't help.  I said take tarp, QE 1 & 2, the auto bailout and Obamas stimulis (2.1 trillion total) and had they given it to everyone over the last 4 years it would have been around the same amount you had per month.  Continuing giving it to Americans for the deration of QE 4 ever would also be a better idea.  Better then letting the banks sit on it I say.  Funny how companies have 2 trillion on the sides which is the same number as all the "stimulus and bailouts" combined.....

Sep 19, 2012 11:10AM
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We are in a stimulous created stock market bubble and now we are moving into a stimulous created housing bubble. I look around and see properties vacant, some for over a year and delapidating because the banks wont reconcile them and write them off their books by puuting them up for sale. Labor participation rate is in the toilet, manufacturing is down, energy and food prices are up, savings is down, yet  the media reports housing is doing well. How is this possible when you need income and savings for a healthy housing market. Simple, more manipulation and artificially propped up markets.
Sep 19, 2012 11:31AM
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So many people, led by the trusty news outlets, miss Romney's point about the 47%.  His comment was not that he does not care about them, but rather they were going to vote Obama and could not be swayed.  So his idea was not to worry about their vote.  That he woule spend his energies on those whose mind was not already made up.

 

For a little red meat for that particular audience, he noted that many of piece of the country do not pay income taxes and have given up looking for work.

 

The counrty can do better!

Sep 19, 2012 12:30PM
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Tumbles...I'm close to your age and it gets better...The older you get you can care even less what SOME people think...ONLY WORRY about the people and friends,that are important, can make a difference and love or like you for what you are...And not what they want you to be...

 

Like Clint said on a TV show in the last week or so....

He at 82-83 doesn't give a damn what anybody thinks, about what he says..or does.

 

Yeah it gets better...

Sep 19, 2012 10:56AM
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Emptychair:" "I am a firm believer in wealth redistribution..." ----

Who isn't it just a matter of which way up or down."


If you look at the statistics, you can see that money has been flowing upwards, while the lower classes continues to see smaller and smaller paychecks as well as a smaller and smaller net worth. So stop blaming the poor for being poor when the game is rigged to take it away from them.

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ever notice that the previous report is always revised down?  Even more telling is that this fact is always reported in the fine print that appears late in the article after the author tries to put some positive spin on a pathetic economy.
Sep 19, 2012 10:39AM
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What on earth caused the sheep to run ....?
Sep 19, 2012 9:57AM
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George Romney, Mitt Romney's father, was on GOVERNMENT WELFARE  when he moved from Mexico to El Paso Texas.

Apparently Social Safety Nets have a purpose.


Sep 19, 2012 11:12AM
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Tumbleweed, you are delusional to extrapolate that kind of garbage in your twisted mind.
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