USA: Dow Jones slips on disappointing housing data, as financial shares fall

Record ID: 863988

  • Title: USA: Dow Jones slips on disappointing housing data, as financial shares fall
  • Date: 20th May 2009
  • Summary: UNIDENTIFIED LOCATION, UNITED STATES (FILE) (REUTERS) VARIOUS WORKERS ON HOUSING CONSTRUCTION SITE
  • Embargoed: 4th June 2009 13:00
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  • Location: Usa
  • City:
  • Country: USA
  • Topics: Finance
  • Reuters ID: LVAEGWED34OG5GWDFPN8B2EQC1B8
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  • Story Text: U.S. stocks slipped on Tuesday (May 19) as financial shares sank and on disappointing housing data, but the Nasdaq rose as investors snapped up technology shares ahead of results from Hewlett Packard.
    Financial shares fell as the U.S. Senate passed a bill to curb sudden credit card interest rate increases and hidden fees, driving the Dow and S&P 500 down in late trade after being higher for much of the day.
    Analysts said the bill would hurt the profits of major credit card issuers.
    Shares of American Express fell 5.1 percent to 24.79 dollars (USD), while Capital One Financial fell 4.5 percent to 24.90 dollars (USD). Shares in JPMorgan Chase & Co were off 3.9 percent to 36.81 dollars (USD).
    Other stocks indexes moved higher on Tuesday as investors bet that an April slide in U.S. housing starts and permits signaled that the housing market may soon stabilize as the supply of new homes dwindles.
    According to the Commerce Department, housing starts fell 12.8 per cent to an annual rate of 458,000 units last month, the lowest since records began in January 1959.
    "The housing starts report was certainly disappointing - it was a lot weaker than what we had expected. In terms of the consumer, if you're not building a house, you're not going to need to put many appliances in it, so it's certainly another hit for consumer sales," said Standard & Poor's Senior Economist, Beth Ann Bovine.
    Analysts said while the housing data pointed to more headwinds in the sector, slower new construction meant inventories should fall, boding well for the market in the long run.
    "The housing stock is very, very high and it needs to be unwound. We have, right now, record levels, or near record levels of inventory of unsold homes sitting on the market. That needs to be taken off the market and basically sold in order to see some kind of more booming housing sector," Bovine said.
    The Nasdaq was cushioned from the worst of the losses as investors snapped up shares in the technology sector ahead of results from Hewlett Packard, betting the tech bellwether might be the latest company to beat estimates.
    The Dow Jones industrial average was down 29.23 points, or 0.34 percent, at 8,474.85. The Standard & Poor's 500 Index was down 1.58 points, or 0.17 percent, at 908.13. The Nasdaq Composite Index was up 2.18 points, or 0.13 percent, at 1,734.54.
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