Wednesday PM April 25th, 2007
by: Ed Mayberry, April 25, 2007 5:04:00 am
New home sales rose last month, but not as much as analysts had been expecting. The Commerce Department reports sales were up 2.6 percent in March--to an annual rate of 858,000 new houses. That's about half the increase Wall Street had expected. It was not enough to offset big declines in the previous two months. Year over year, new home sales were down 23.5 percent from the March 2006 level. Chief economist Dave Seiders with the National Association of Home Builders says he'll be cutting his forecast based on the report. He says the most slowdown in the housing market resulted from tighter lending standards in the wake of the subprime mortgage meltdown.
Despite sluggish manufacturing largely due to the housing slump, most parts of the country logged moderate economic growth in the early spring. In its latest Beige Book report on conditions around the nation, the Federal Reserve said that "manufacturing activity was slow'' in many areas. It also found that "residential real estate activity continued to weaken, with sales declining in many districts and flat in a number of others.'' And while most regions reported "only modest or moderate expansions,'' the Fed said there were some exceptions. The central bank says the Minneapolis region reported "firm growth" and the Dallas region characterized economic activity as "moderately strong." Information from the survey will figure into discussions at the Fed's next meeting on May 9th.
The Commerce Department says orders for big-ticket manufactured goods rose 3.4 percent in March. It's a stronger-than-expected report and the best performance for durable goods in three months. Much of the rise came from a big increase in demand for commercial aircraft. At the same time, a measure excluding aircraft also posted a strong gain. Manufacturing has seen a slowdown in recent months. That has reflected troubles in the housing industry, cutting demand for construction equipment, and weakness in the auto industry.
It's a first—a milestone on Wall Street. The Dow Jones Industrial Average closed above the 13,000 level for the first time ever. It finished the day up 136 points at 13,089. Helping to set the tone for a move through record territory, the positive combination of better-than-expected earnings and economic data. It took the Dow just 129 trading days, since October 18th, to make the thousand-point move up from 12,000. The S&P 500 has yet to reach its closing peak of 1,527 reached in March 2000. The Nasdaq Composite would need to double to reach its high seen in March 2000.
ConocoPhillips said first-quarter profit rose 7.7 percent as income from asset sales helped offset lower commodity prices and higher operating costs. Net income for the Houston-based company rose to $3.55 billion for the January-March period. The nation's third-largest oil and gas producer said its profit revenue fell 11.9 percent to $41.3 billion. Wall Street analysts polled by Thomson Financial were expecting revenue of $55 billion. The earnings results fell three cents short of the analysts' forecast because it typically does not include one-time gains or expenses.