Stocks fell for the fourth day in a row.
First, the scoreboard:
- Dow: 15,334.5, -66.7 -0.4%
- S&P 500: 1,697.4, -4.3, -0.2%
- NASDAQ: 3,768.2, +2.9, +0.0%
And now the top stories:
- The S&P/Case-Shiller home price index showed that average home prices climbed by 0.6% month-over-month in July, or 12.3% year-over-year. This was the 18th consecutive month of growth, and 18 of 20 cities saw prices rise month-over-month. “While the growth rate in house prices may slow in the coming months from the heady growth rates over the past year — the 3-month annualized change in home prices has decelerated to +10.0% from nearly +22.0% in April — house prices should continue to grow well above the rate of nominal GDP growth for at least the next year,” said Deutsche Bank’s Joseph LaVorgna.
- “Following the increase in mortgage rates beginning last May, applications for mortgages have dropped, suggesting that rising interest rates are affecting housing,” said S&P’s David Blitzer. “The Fed’s announcement last week that QE3 bond buying will continue for the time being may have only a limited, though favourable, impact on housing.”
- “We continue to see long-term fundamental demand in the market driven by the significant shortfall of new single-family and multi-family homes built over the last five years,” said Stuart Miller, CEO of homebuilder Lennar. “While there may be bumps along the road that may impact the short-term pace of the recovery, the long-term outlook for our business remains extremely bright.
- The Conference Board’s measure of consumer confidence fell to 79.7 in September from 81.8 in August. Economists were looking for a reading of 79.9. “Consumer Confidence decreased in September as concerns about the short-term outlook for both jobs and earnings resurfaced, while expectations for future business conditions were little changed,” said the Conference Board’s Lynn Franco. “Consumers’ assessment of current business and labour market conditions, however, was more positive. While overall economic conditions appear to have moderately improved, consumers are uncertain that the momentum can be sustained in the months ahead.”
- From Deutsche Bank’s LaVorgna: “We view the confidence data as suggesting there has been some retrenchment in household attitudes of late, which is possibly reflecting the weaker than expected August employment report, concerns earlier in the month regarding military intervention in Syria as well as anxiety over a possible government shutdown/debt ceiling stand-off in the near future.”
- The Richmond Fed’s manufacturing activity index plunged to zero from last month’s reading of 14. Zero is the breakeven level. From the Richmond Fed: “Shipments, capacity utilization, and vendor lead time flattened, while the volume of new orders slowed. The backlog of new orders remained in decline. Finished goods inventories and raw materials inventories built up at about the same pace as in August. Manufacturing employment fell and the average work week shrank, while wage growth remained robust.”
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