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Minyanville's Market Recap: Housing Gets Uglier, Stocks End The Day Flat


Housing Data and Consumer Confidence painted an ugly picture: It may be surprising that stocks even ended the day flat.

Stocks ended the session flat today. The Dow Industrials added +0.19% to close at 13,784, the S&P 500 lost -0.03% to close at 1,517, and the Nasdaq Composite added +0.58% to close at 2,683.

Equities were flat for much of the day even as a number of events weighed down on stock prices. Retailers were under significant pressure this morning as Lowe's (LOW) revised its guidance lower citing drought conditions in various parts of the country. Target (TGT) also made headlines when it cut same-store sales figures for the month of September. As expected, our retail specialist Professor Macke chimed in with his article Bringin' It Home, advising readers not to overreact: "Target coming in light certainly isn't a good sign, but it's hardly an entire 'short the consumer' thesis by itself any more than Target's strong quarter meant it was going to be a great Christmas."

Homebuilders were hurt by economic data today. Existing home sales came in at 5.50 mln versus 5.48 mln cons. In addition the S&P/ Case-Shiller home-price index was also released. The index showed home prices in 20 U.S. metropolitan areas fell the most on record in July, dropping 3.9% versus a 3.4% drop in June. The index declined in January for the first time since the group began tracking the data and the index has fallen every month since. (From Bloomberg) Please read Professor Depew's Five Things You Need To Know as he gives more color on this disturbing trend.

Lennar (LEN) had a decidedly negative performance. The company reported its biggest quarterly loss in its 53-year history. The stock fell almost 4%. Other notables include D.R. Horton (DHI) losing -2.0%, Ryland Group (RYL) losing -2.3%, and Hovnanian (HOV) losing -1.7%. As other professors predict a bottom in housing is near, Professor Zucchi stuck to his guns forecasting the Philly Housing Index (HGX) to be in double digits.

Consumer Confidence was also released, coming in at 99.8 versus 104.3 cons. The figure fell to its lowest level in almost two years, causing investors to wonder about the health of the consumer.

Financials ended the day mixed. Minyan Peter was back in action digging through Discover Financial Services' (DFS) numbers. The company reported 3Q earnings better than expected with $0.42 EPS versus $0.38 cons. Minyan Peter was unconvinced, citing on the Buzz a lack of a dividend and a drop in managed margins amongst other things. DFS ended up closing -2.4% on the day. Other notable financials were Merrill Lynch (MER) losing -2.1%, Morgan Stanley (MS) losing -1.4%, and Countrywide (CFC), back at the 18 level and losing -1.2%. Toddo always says, "As go the financials, so goes the tape." Click here to read the rest of today's Random Thoughts.

For more summaries of what happened on the Buzz & Banter, please click on our Buzz Bits.

Tomorrow, investors will get another clue of the health of the economy when Durable Goods data is released at 8:30 AM EST. Economists expect the figure to decrease by -2.5%. Weekly crude inventories will also be released at 10:30 AM EST. Last week's figure showed a draw in inventories of -3874 k. Please click here for the full trading radar.

Below is a recap 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: VAR, SECTB, HOKU, GVP, BRCM, IVNYY, NVDA, SNCR, MSFT, SYMC, MFE, DISH, ARRS, MAN, VRSN

Some bearish trade or investment ideas: TGT, XHB, SPF, COF, BHI, DXY, LOW, HGX, DES, IYR, CFC, CSGP, AAPL, Crude, Energy

Ok, Minyans. Hope you had a great day. Please join us again tomorrow as Hoofy and Boo have cooked up another great video. Y'all have a good night!
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