Stocks Are Down On Boxing Day

I hope everyone had a nice Christmas. The stock market is open again after a closed day yesterday and a half day on Monday.

So far, stocks are down today but it’s not too bad. The S&P 500 is hovering right about 1,420. This could be the third down day in a row. Bear in mind that we had a six-day winning streak earlier in the month.

Ford Motor ($F) had a great day on Monday as the stock soared above $12 for the first time since April. I’m happy to see that Ford continues to hold on to those gains today.

We had more good news from the housing market. The Case-Schiller Index reported that home values rose 4.3% in the 12-month period ending in October. That’s the biggest year-over-year gain since May 2010. It was also above what economists had been expecting.

The price increase accelerated from a 3 percent advance in the 12 months ended September. The Case-Shiller index is based on a three-month average, which means the October data were influenced by transactions in August and September.

Residential homebuilding has contributed 0.3 percentage point to gross domestic product on average in the first three quarters of 2012, according to Commerce Department data. The last time it added to growth for an entire year was in 2005, when it boosted the economy by 0.36 point.

Home prices adjusted for seasonal variations rose 0.7 percent in October from the prior month, with 17 of 20 cities showing gains, according to today’s report. Las Vegas showed the biggest gain with a 2.4 percent advance, followed by San Diego with a 1.7 percent increase.

What’s the impact for investors of recovering housing? I tried to address that recently when The Atlantic asked me to contribute to a round-up of favorite charts of 2012. Here’s my entry:

This shows the Retail ETF (XRT) beating the S&P 500 this year, while the Homebuilders ETF (XHB) has absolutely creamed it. The move in the homies is much more dramatic since it’s coming off a lower base. That’s been the story this year: recovering housing slowing lifting consumers. In June, Walmart finally took out its high after 12.5 years

Posted by on December 26th, 2012 at 11:29 am

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