Oddly, investors chose to ignore warnings of a dismal year from home builders and pushed up shares of D.R. Horton Inc (NYSE:DHI), Toll Brothers Inc (NYSE:TOL), M.D.C. Holdings Inc. (NYSE:MDC), The Ryland Group Inc (NYSE:RYL) and Pulte Group Inc (NYSE:PHM) on Monday.
According to The National Association of Home Builders, sentiment for April dropped back to 16 after going up to 17 in March. A reading below 50 indicates a negative sentiment, to show how weak the outlook for 2011 is. It has been five years since the index has been above the 50 mark.
Various negative catalysts including high unemployment, tighter lending standards and bigger requirements for down-payments are keeping many people from buying homes. Also a record number of foreclosures are pushing down home prices, leaving potential buyers concerned that the market has yet to reach bottom.
The index gauging existing conditions dropped one point, to 16, while the recorded foot traffic of prospective buyers increased by a point, to 13. The estimate of single-family home sales over the next six months fell three points, to 23, declining to its lowest level since October.
Some of this is affected by regions and extent of weakness, but overall there's little to be excited about with the home builders.
PulteGroup closed at $7.84 on Monday, gaining $0.02, or 0.26 percent. The Ryland Group ended the session at $16.91, up $0.39, or 2.36 percent. M.D.C. Holdings Inc. closed at $27.26, rising $0.38, or 1.41 percent. Toll Brothers climbed to $20.58, closing at $0.46, increasing 2.29 percent. D.R. Horton ended the day at $11.67, up $0.14, or 1.21 percent.
Tuesday, April 19, 2011
Home Builders Toll (TOL) (DHI) (MDC) (RYL) (PHM) Close Up Even with Dismal Outlook
Labels:
DR Horton,
MDC Holdings,
PulteGroup,
Ryland Group,
Toll Brothers
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