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Market Recap: New Home Sales Disappoint; Markets End Flat


New Home Sales declined, hitting a 12-year low. Homebuilders and financials were hurt. Markets end flat.

The markets were flat headed into the weekend. The Dow Industrials added +6 points, or +0.05% to 13365, the S&P 500 added +2 points, or +0.14%, and the Nasdaq Composite lost -2.3 points, or -0.09% to 2674.

Homebuilders were hurt by economic data today. The Commerce Department reported November New Home Sales came in at 647,000 less than analyst expectations of 715,000. The sales marked a -9.0% month-over-month decline as well as a 12-year low. In addition, last month's figure was revised downwards to 711,000 from 728,000.

"I was trying to find a bronze – or even tin – lining to this morning's new home sales numbers, but can't find any even further down the metal scale. In fact, in 1990 new home sales bottomed out at a 400k pace, and that would be quite an accomplishment given that… we can conclusively state that things are much worse," said Professor Fil Zucchi.

Beazer Homes (BZH) led the home builders to the downside, falling -6.57%. DR Horton (DHI) fell -4.10%, and KB Homes (KBH) fell -4.57%. The iShares DJ Real Estate Index (IYR) fell -1.47% and mortgage lender Countryside Financial (CFC) fell -3.32%. Read Professor Mish Shedlock's A Matter Of Choice.

Financial stocks ended in negative territory due to the disappointing data. Shares of JP Morgan Chase (JPM) fell -0.87%. Merrill Lynch (MER) fell -0.41%, and Goldman Sachs (GS) closed unchanged.

"Clearly we have experienced a bear market in credit this year. From my chair, I don't think it is over. Not even close. I look for loads of write downs, loads of layoffs and an earnings recession at the very least. After all, if credit costs are growing, the economy is stalling and we are coming off record margins, how do earnings grow?" asked Professor Bennet Sedacca.

In commodities, gold moved higher +10.60 to 842.40. Crude oil fell -0.35 to 96.27. Silver added +0.079 to 14.770, and copper fell -4.75 to 306.00. Check out our best of gold content in Did All That's Gold Glitter In 2007?

For more summaries, click on Minyanville's Buzz Bits.

Idea Flow

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: MTW, CSUN, ESLR, JBL, BSC, ZEUS, CLF

Some bearish trade or investment ideas: AMLN, HOV, BZH, SPF

Have a great weekend! Be safe and we'll see you on Monday!

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No positions in stocks mentioned.

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