CHCI Comstock Holding Companies Inc

 

Markets opted to take a pause after a recent rally, as mixed economic data and a session featuring light volumes meant benchmarks ended Tuesday’s session on a flat note. Given the Christmas overhang, consolidated volumes remained substantively low, and final minutes’ movement took the Dow slightly lower to end its winning run of four consecutive trading days.

 

The Dow Jones Industrial Average (DJIA) slipped 2.6 points or 0.02% to finish the day at 12,291.35. The Standard & Poor 500 (S&P 500) also remained almost unchanged at 1,265.43, gaining 0.01%. The Nasdaq Composite Index was up 0.3% and finished yesterday’s trading session at 2,625.20. The fear-gauge CBOE Volatility Index (VIX) went up 5.7% to settle at 21.91. Consolidated volumes on the New York Stock Exchange (NYSE), NYSE Amex and Nasdaq, were roughly 3.59 billion shares, which were significantly lower than the year's daily average of almost 7.9 billion shares. For 50% of the advancing stocks on the NYSE, 47% of the stocks traded lower. The remaining stocks were left unchanged.

 

Since last week, investors had been receiving Christmas gifts in the form of encouraging economic data. Housing and the jobs markets, two of the key elements of the economy, posted strong data last week. The jobs market showed significant strength, as data from U.S. Department of Labor provided investors with a welcome reprieve after initial claims dropped to a three and half year low.

 

However, a 9.3% rise in housing starts and building permits shooting up to its highest level since March 2010 were slightly offset by home sales data from the National Association Realtors (NAR) released on Wednesday. Additionally, data on revised home sale counts of 2007, according to which existing home sales were 14.3% worse than previously reported came as a disappointment to investors last week. Monday’s markets were also guided by economic data, which included a joint release by the U.S. Census Bureau and the Department of Housing and Urban Development according to which new home sales had increased more than the consensus estimate.

 

It was the S&P/Case-Shiller Home Price Index data, which took the sheen away from markets’ initial modest gains, as it reported a drop in home price in 19 of the 20 cities. The report stated: “Data through October 2011, released today by S&P Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed decreases of 1.1% and 1.2% for the 10- and 20-City Composites in October vs. September. Nineteen of the 20 cities covered by the indices also saw home prices decrease over the month. The 10- and 20-City Composites posted annual returns of -3.0% and -3.4% versus October 2010, respectively”.

 

Since these are a group of indexes that track changes in home prices throughout the United States; this data holds immense value for investors. A drop in home prices, as reflected through the S&P/Case-Shiller Home Price Index naturally had an adverse impact on markets. The PHLX Housing Sector (HGX) was down 0.1% and stocks like KB Home (NYSE:KBH), DR Horton Inc. (NYSE:DHI), Beazer Homes USA Inc. (NYSE:BZH), Comstock Homebuilding Companies Inc. (NASDAQ:CHCI), Lennar Corp. (NYSE:LEN) dropped 2.6%, 0.8%, 2.1%, 1.3% and 0.4%, respectively.

 

Earlier, strong consumer confidence data helped stocks register modest gains. Consumer data is another key indicator of the economy’s health. Investors received a boost after the Commerce Department reported that U.S. consumer confidence had increased to 64.5 in December from 55.2 in November. The figure was also well ahead of the consensus projection of 59.3. In the report released by The Conference Board, Lynn Franco, Director of The Conference Board Consumer Research Center, stated: "After two months of considerable gains, the Consumer Confidence Index is now back to levels seen last spring (April 2011, 66.0). Consumers’ assessment of current business and labor market conditions improved again.  Looking ahead, consumers are more optimistic that business conditions, employment prospects, and their financial situations will continue to get better”.

 

However, major retail stocks could not garner strong gains. While stocks like J. C. Penney Company, Inc. (NYSE:JCP), Bon-Ton Stores Inc. (NASDAQ:BONT) and Saks Incorporated (NYSE:SKS) slipped 1.1%, 3.3% and 1.1%, respectively, others like Macy's, Inc. (NYSE:M), Target Corp. (NYSE:TGT), Dillard's Inc. (NYSE:DDS) and Nordstrom Inc. (NYSE:JWN) only managed gains of 0.3%, 0.8%, 2.5% and 0.5%, respectively.

 

 
BON-TON STORES (BONT): Free Stock Analysis Report
 
BEAZER HOMES (BZH): Free Stock Analysis Report
 
COMSTOCK HMBLDG (CHCI): Free Stock Analysis Report
 
DILLARDS INC-A (DDS): Free Stock Analysis Report
 
D R HORTON INC (DHI): Free Stock Analysis Report
 
PENNEY (JC) INC (JCP): Free Stock Analysis Report
 
NORDSTROM INC (JWN): Free Stock Analysis Report
 
KB HOME (KBH): Free Stock Analysis Report
 
LENNAR CORP -A (LEN): Free Stock Analysis Report
 
MACYS INC (M): Free Stock Analysis Report
 
SAKS INC (SKS): Free Stock Analysis Report
 
TARGET CORP (TGT): Free Stock Analysis Report
 
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