Stocks tread water amid strong housing data
Stocks on the American exchanges were relatively unchanged after building permits and house prices beat expectations in October. The reports suggest the housing market may be regaining momentum at the start of the fourth quarter.
Building permits for new residential construction projects rose 6.2 percent in October, a five-year high. Multi-family housing units rose 15.3 percent to 414,000, and were the biggest factors behind the monthly expansion. In a separate report the Federal Housing Finance Agency said home prices rose 2 percent in the third quarter, despite a considerable slowdown in September. House prices rose for the ninth consecutive quarter in Q3, the report concluded.
Strong housing data helped lift the Standard & Poor’s 500 Index toward another record in intraday trade. The S&P index for homebuilders rose 4.1 percent. The benchmark gauge would eventually pare its gains in the final minutes of the session, closing flat at 1,802.75. The Dow Jones Industrial Average rose in intraday trade before paring its gains, closing at 16,072.80. In total, 12 of the Dow’s 30 members reported gains, led by Walt Disney Company (NYSE:DIS) and Boeing (NYSE:BA) , which advanced at least 1.34 percent.
“We’re tending to move in a positive direction,” said Kate Warne of Edward Jones & Co. “We’re getting data in a sweet spot. It’s positive but not so positive as to raise worries about the Fed moving sooner and yet it continues to show the economy is gaining traction.”
Speculation about the pace and timing of a Federal Reserve bond taper continues to make headlines. The central bank is expected to maintain the $85 billion pace of asset purchases until the spring. Next week’s jobs report will bring us closer to determining whether a taper could occur at the next FOMC meetings, scheduled for December 17-18.
Three rounds of monetary easing have helped lift the S&P 500 Index more than 160 percent higher since hitting a nearly 13-year low in March 2009.
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