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Housing Stocks Escape the Hawk's Wrath


End of Day Roundup 02/20: Today's financial recap and tomorrow's financial outlook.

Stocks pulled a pop-and-drop on Friday as hawkish comments from a Fed official soured the mood.

January new-home sales were 4.62 million, just a hair shy of the 4.67 million consensus.

However, housing stocks reacted positively to the number, with the iShares US Home Construction ETF (NYSEARCA:ITB) rising an impressive 1.0%, putting it ahead of all other sectors for the day.

This indicates that expectations heading into the report were fairly low, courtesy of 2014's stream of mediocre economic data and sluggishness in other economically sensitive sectors like retail and financials.

Housing stocks were also boosted by the 2-bps drop in the 10-year US Treasury to 2.73%.

And with Friday's gain, housing is handily outperforming the S&P 500 (INDEXSP:.INX) year-to-date, defying skeptics fixated on the impact of the polar vortex and the shaky employment market.

The broader markets popped modestly in the early going, with the S&P nearly hitting Wednesday's intra-week high, but the index sold off to finish down 0.2% at 1836.25.

Dallas Fed President Richard Fisher spoke in Austin, Texas, today, giving typically hawkish views on the Fed's asset-purchasing schedule. Additionally, Fisher discussed a change in attitude at the Fed, as in the future, forward guidance will play a bigger role in monetary policy rather than asset purchases.

Looking at individual stocks, Barnes & Noble (NYSE:BKS) rose 5.4% to $17.69 after investment company G Asset Management offered $672 million for a 51% stake in the book retailer.

On the negative side of the tape, Groupon (NASDAQ:GRPN) took a beating, falling a whopping 21.9% after reporting stronger-than-expected fourth-quarter results. However, the company warned of rising marketing costs, which weighed on sentiment.

And Hewlett-Packard (NYSE:HPQ) was in the green in early trading on its fiscal fourth-quarter earnings beat, but the stock reversed lower to finish down 1.3%.

Tomorrow's Financial Outlook

On Monday, we'll see the Chicago Fed National Activity Index at 8:30 a.m. EST, followed by the Dallas Fed Manufacturing Activity report at 10:30 a.m.

There are a handful of earnings reports on deck, including Palo Alto Networks (NASDAQ:PANW) and Hertz Global (NYSE:NTZ) before the open and Frontier Communications (NYSE:FTR) and Tenet Healthcare (NYSE:THC) after the close.

Twitter: @Minyanville

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