Homebuilders send Nasdaq, S&P down

| February 7, 2006 | 0 Comments

Wall Street results were mixed by midday on Tuesday as the homebuilding sector was affected by bad news from luxury builder Toll Brothers, even as firms in other sectors released better-than-anticipated quarterly reports. While the Dow Jones Industrial Average had gained 0.1 percent to 10,805.63 by the middle of the trading day, the Nasdaq and the S&P 500 had each lost 0.3 percent to 2,251.86 and 1,260.79 respectively.

Homebuilder Toll Brothers released a report saying that sales in the first quarter were down 29 percent and cutting is sales guidance for the year. This was seen as yet another sign that the US housing market is not as robust as it has been in recent times. Toll Brothers was down 3.1 percent to $30.23. In addition, DR Horton lost 2.7 percent to $34.01, while Pulte Homes dropped 1.6 percent to $37.33.

Besides affecting homebuilders, the news from Toll Brothers also had an effect on the retail home improvement sector. Home Depot was down 1.6 percent at midday to $38.86, while Loews dropped 0.9 percent to $62.36.

The Dow was helped by good news from Walt Disney and Coca-Cola. Disney’s report of an unexpected rise in first-quarter profits, combined with the announcement that it’s radio division was merging with Citadel Broadcasting sent shares in Disney up 5.1 percent to $26.24. This wasn’t quite as advantageous for Citadel, which dropped 4.8 percent to $11.42.

Meanwhile, Coca-Cola also reported quarterly gains, which sent its shares up 0.7 percent to $41.22.


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