Housing, Oil Take Control — Wednesday’s IP Market Recap

by Marc Bastow | September 19, 2012 5:20 pm

IPMarketRecap Housing, Oil Take Control    Wednesday's IP Market Recap[1]A stronger-than-expected report on existing home sales combined with a steep drop in oil prices helped move the markets forward with at least a little conviction on Wednesday.

Housing starts and permits rose substantially[2] to an annual rate of 750,000 in August, up 29% from last year while sales of previously occupied homes climbed 7.8% from a year ago, according to the National Association of Realtors.

While not all share the upbeat sentiment, homebuilders have become increasingly bullish — a confidence index from the National Association of Home Builders reached its highest level since June 2006.

Housing-related stocks moved higher after the existing home sales report. Homebuilders Lennar (NYSE:LEN[3]) and KB Home (NYSE:KBH[4]) gained over 2% on Wednesday, while home-improvement retailers Home Depot (NYSE:HD[5]) and Lowe’s (NYSE:LOW[6]) both rose over 1%.

Meanwhile, oil prices fell more than 4% Wednesday to $91.25 a barrel, its lowest level since August, as Middle East fears eased and the latest U.S. government report showed a greater buildup in crude inventories than expected.

The net result was a broader rally, with the Dow rising 0.1% to 13,577, the S&P up 0.12% to 1,461 and the Nasdaq the big winner with a 0.15% gain to end at 3,182.

Shares of Groupon (NASDAQ:GRPN[7]) rallied up more than 13% as the company announced a mobile payments platform to allow merchants to accept credit card payments[8] by using swipers on Apple (NASDAQ:AAPL[9]) iPhones or iPod Touches.

Earnings news drove much of the rest of the market. General Mills (NYSE:GIS[10]) rose 2% after reporting quarterly earnings of 66 cents per share[11] that just beat Street expectations. The company is also bringing back marketing icons[12] The Jolly Green Giant and the Cheerios Kid to boost its marketing efforts.

AutoZone (NYSE:AZO[13]) also reported better-than-expected earnings[14], though same-store sales fell below forecasts; AZO shares traded up more than 3% on the day.

Shares of restaurant chain Cracker Barrel (NASDAQ:CBRL[15]) soared more than 5% as the company announced strong earnings, raised its quarterly dividend 25%, announced a new $100 million share repurchase plan and provided analysts with positive forward guidance.

Thursday’s earnings releases include Oracle (NASDAQ:ORCL[16]), ConAgra (NYSE:CAG[17]), Rite-Aid (NYSE:RAD[18]), and CarMax (NYSE:KMX[19]).

Three Up

Three Down

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long AAPL.

Endnotes:
  1. [Image]: http://www.investorplace.com/hot-topics/investorplace-market-recap/
  2. rose substantially: http://www.realtor.org/news-releases/2012/09/august-existing-home-sales-and-prices-rise
  3. LEN: http://studio-5.financialcontent.com/investplace/quote?Symbol=LEN
  4. KBH: http://studio-5.financialcontent.com/investplace/quote?Symbol=KBH
  5. HD: http://studio-5.financialcontent.com/investplace/quote?Symbol=HD
  6. LOW: http://studio-5.financialcontent.com/investplace/quote?Symbol=LOW
  7. GRPN: http://studio-5.financialcontent.com/investplace/quote?Symbol=GRPN
  8. allow merchants to accept credit card payments: http://investorplace.com/ipo-playbook/groupon-launches-mobile-payment-service-grpn/
  9. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  10. GIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GIS
  11. quarterly earnings of 66 cents per share: http://investorplace.com/2012/09/general-mills-q1-profits-soar/
  12. marketing icons: http://investorplace.com/2012/09/two-classic-general-mills-mascots-are-back/
  13. AZO: http://studio-5.financialcontent.com/investplace/quote?Symbol=AZO
  14. better-than-expected earnings: http://investorplace.com/2012/09/autozone-driving-higher-profits-despite-lower-sales-az/
  15. CBRL: http://studio-5.financialcontent.com/investplace/quote?Symbol=CBRL
  16. ORCL: http://studio-5.financialcontent.com/investplace/quote?Symbol=ORCL
  17. CAG: http://studio-5.financialcontent.com/investplace/quote?Symbol=CAG
  18. RAD: http://studio-5.financialcontent.com/investplace/quote?Symbol=RAD
  19. KMX: http://studio-5.financialcontent.com/investplace/quote?Symbol=KMX
  20. S: http://studio-5.financialcontent.com/investplace/quote?Symbol=S
  21. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  22. OMX: http://studio-5.financialcontent.com/investplace/quote?Symbol=OMX
  23. BONT: http://studio-5.financialcontent.com/investplace/quote?Symbol=BONT
  24. CSTR: http://studio-5.financialcontent.com/investplace/quote?Symbol=CSTR
  25. WM: http://studio-5.financialcontent.com/investplace/quote?Symbol=WM

Source URL: http://investorplace.com/2012/09/housing-oil-take-control-wednesdays-ip-market-recap-len-kbh-hd-low-grpn/
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