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Pre-Market Primer: Homebuilder Adds to Housing Optimism


Lennar had a solid quarter, but this wasn't the case for China and Europe.

MINYANVILLE ORIGINAL US stock futures fell today on global economic concerns, though a homebuilder's earnings statement provided a bullish sign for this week's housing indicators.

The Dallas Fed will release its Texas-area manufacturing index at 10:30 a.m. Economists expect the index to show that the business climate improved in September to one, up from negative 1.6 last month.

Lennar Corp (NYSE:LEN), one of the country's biggest homebuilders, beat earnings expectations for the third quarter by a wide margin.

"The housing market has stabilized and the recovery is well underway," CEO Stuart Miller said in the company's release. "Low mortgage rates, affordable home prices, increased buyer confidence and an extremely favorable rent-to-own comparison are driving growth in each of our markets. Additionally, reduced foreclosures and declining distressed home inventory are further contributing to the improvement in the housing market."

Lennar's results are a positive sign for the S&P/Case-Shiller Home Price Index which will come out tomorrow. The 20-city index is expected to have risen 0.9% month-over-month in July. On Wednesday, a report on August new home sales is expected to have risen to a seasonally adjusted annual rate of 380,000 from 372,000 in July.

Future contracts for US stocks followed European and Asian shares downward this morning. Dow (INDEXDJX:.DJI) futures dropped 0.33% to 13,456.00, S&P 500 (INDEXSP:.INX) futures slipped 0.32% to 1,447.20, and Nasdaq (INDEXNASDAQ:.IXIC) futures were down 0.25% at 2,845.25.

China's Beige Book added to the gloomy economic data coming from the second-largest economy. The release showed that retailers and manufacturers were less optimistic now than they were before the country's aggressive monetary easing, interest rate cuts, and public works projects this summer. Other Chinese indicators are also pointing to a more weakened economy. Last week, the country's manufacturing PMI showed an eleventh straight month of contraction this month.

Greek media reported that the country is facing a budget shortfall of $26 billion, which is about twice as wide as anticipated. The government has denied these claims.

Germany's IFO survey fell to 101.4 from 102.3 for September, signaling that business conditions and economic sentiment fell slightly in the eurozone's largest economy.

Late on Friday, Apple (NASDAQ:AAPL) asked the courts for another $707 million from Samsung (PINK:SSNLF) in addition to the $1.05 billion that it won for copyright infringement last month. If Apple wins the case, 29 Samsung devices will be banned from being sold in the United States.

Facebook (NASDAQ:FB) shares are off 4.2% at $21.90 this morning as Barron's declared on its cover that the social network's stock price should be $15.

Today, UnitedHealth (NYSE:UNH) will replace Kraft (NASDAQ:KFT) in the Dow Jones Industrial Average.

Twitter: @vincent_trivett
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