Markets
For the week of Monday, September 23, 2013, through Friday, September 27, 2013:
- Standard & Poor’s 500 Index: -1.02%
- Dow Jones Industrial Average: -1.25%
- NASDAQ Composite: 0.21%
As investors tried to determine the future policy moves of the Federal Reserve, stocks fell Monday, extending Friday’s steep declines. The markets remained lower on Tuesday, suffering a fourth-straight loss. A late slide in the financial sector coupled with uncertainties over budget discussions weighed on investor sentiment. Declining for a fifth straight session on Wednesday, the S&P 500 notched its longest losing streak this year. The S&P 500 is down 1.9% since it closed at a record 1725.5 last Wednesday. However, a better-than-expected durable-goods report and new home sales helped stem losses.
On Thursday, stock futures nudged higher as the market attempted to stabilize after a recent string of losses. Stocks closed lower on Friday as a result of declining consumer sentiment concerns and worries Congress might not pass legislation to keep the U.S. government fully operational past Monday. Data also showed September’s consumer sentiment fell to its lowest level since April.
Economic Data
- Chain Store Sales Snapshot:
- The chain store sales index fell 1%.
- Year-over-year growth slowed to 1.6%.
- Case-Shiller Home Price Index:
- Existing-home price appreciation accelerated on a year-ago basis in the three months ending in July, relative to the same period in June.
- The 10-city composite is up 12.3% over last year, compared to the 11.9% gain originally reported last month.
- The 20-city composite is up 12.4%, above the 12.1% reported increase last month.
- Non-seasonally adjusted, the 10- and 20-city composites were up 1.9% and 1.8%, respectively, month-to-month.
- Seasonally adjusted the 10- and 20-city composites were up 0.7% and 0.6%, respectively, month-to-month.
- Atlanta increased 18.5% year-over-year.
- Existing-home price appreciation accelerated on a year-ago basis in the three months ending in July, relative to the same period in June.
- Conference Board Consumer Confidence:
- September Consumer Confidence fell to 79.7 from August’s 81.8.
- With the debt ceiling debates looming, this falls in line with forecasts.
- MBA Mortgage Applications Survey:
- Mortgage applications rose for the second week, increasing 5.5%.
- The purchase index rose by 6.6%
- The refinance index rose 4.9%.
- Mortgage applications rose for the second week, increasing 5.5%.
- Durable Goods:
- New orders for durable goods rose 0.1% in August, an increase over July’s 8.1% decrease.
- Excluding transportation, new orders declined 0.1%.
- Total shipments increased 0.9%.
- Inventories grew 0.1%.
- Core capital orders declined 0.8%
- Shipments rose 1.3%.
- New orders for durable goods rose 0.1% in August, an increase over July’s 8.1% decrease.
- New Home Sales:
- August new-home sales met expectations of 421,000 units.
- This is 7.9% above July’s rate of 390,000, and 12.6% higher than August 2012 sales.
- Months’ supply fell to five.
- Inventories rose slightly.
- The median price is up 0.5% over last year.
- August new-home sales met expectations of 421,000 units.
- Jobless Claims:
- Initial claims for unemployment insurance fell 5,000 to 305,000.
- The four-week moving average fell 7,000 to 308,000.
- Continuing claims in the week rose 35,000 to 2.8 million.
- Gross Domestic Product:
- Real GDP grew 2.5%.
- This was in line with the second estimate and up from 1.1% growth in the first quarter.
- Faster growth in nonresidential investment, particularly structures, exports and reduced imports were the main driver.
- Profits rose 3.3%, after falling 1.3% in the first quarter.
- Real GDP grew 2.5%.
Earnings:
- CarMax Inc. (NYSE: KMX)
- CarMax reported profits rose 26% on stronger used car sales.
- Profit was $140.3 million versus $111.6 million last year.
- CarMax earned $0.62 a share versus $0.48 a share, year-over-year.
- Analysts expected $0.57 a share.
- Sales increased 18% at $3.25 billion, also beating analyst estimates of $3.16 billion estimate.
- Total used vehicle sales rose 20% to $2.64 billion.
- CarMax reported profits rose 26% on stronger used car sales.
- Lennar Corp. (NYSE: LEN)
- Lennar earned $120.7 million, or $0.54 a share, compared to $87.1 million, or $0.40 a share, one year ago.
- Revenue rose to $1.6 billion from $1.1 billion.
- New orders increased 14%.
- Analysts expected $0.45 a share on revenue of $1.55 billion.
- Lennar earned $120.7 million, or $0.54 a share, compared to $87.1 million, or $0.40 a share, one year ago.
- Bed Bath & Beyond Inc. (NASDAQ: BBBY)
- For the quarter, BBBY earned $249.3 million, or $1.16 a share, compared to $224.3 million, or $0.98 a share, year-over-year.
- Analysts expected $1.12 a share.
- Revenue increased to $2.82 billion.
- BBBY also provided a fourth-quarter outlook, saying it expects earnings per share of $1.70 to $1.77, while analysts were looking for $1.83 a share.
- For the quarter, BBBY earned $249.3 million, or $1.16 a share, compared to $224.3 million, or $0.98 a share, year-over-year.
Interest Rates
- The two-year Treasury rates ticked up one basis point to 0.34%.
- The five-year Treasury rate dipped five basis points to 1.42%, down more than 40 points in the last three weeks.
- The 10-year Treasury rate dropped 10 basis points to 2.64%, almost 40 points lower since early September as well.
- The 30-year Treasury yield fell eight basis points to 3.68%.