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Market Update

Yellen Highlights Weak Housing Recovery, Home Sales Near 9-Year High


Author: Nichole Harper
ticker.com
Last Update: 12:22 PM ET February 25 2015

12:20 PM New York – U.S. stocks traded sideways and new home sales were nearly unchanged in January but supply increase. U.S. Fed Chair Janet Yellen highlighted the weaker than expected housing market recovery. Chesapeake and Hewlett Packard fell on earnings.

U.S. stocks traded sideways and new home sales declined less than estimated and tech heavy Nasdaq index is set to advance for the 11th-day in a row.

Fed Chair Janet Yellen in the second day of testimony to the U.S. Senate Banking Committee that increases in inflation and wages remain too low for interest rate to be revised higher at the next meeting.

Yellen also said that housing market recovery has been weaker than expected but the slow and steady increase in wages will give more push to the sector.

Separately, U.S. Commerce Department said new home annual sales rate in January declined 0.2% to 481,000 from the revised 482,000 rate in December.

The annual rate of increase in the previous month was the highest rate of 481,000 units in June 2008.

Largely because of inclement weather, home sales in the Northeast plunged 51.6% to a record low and sales in the West declined 0.8%. Sales in South gained 2.2% to a record high since May 2008 and soared 19.2% in the Midwest.

The median new home price soared 9.1% from a year ago to $294,300 and new home sales inventory increased 1.4% to 218,000 and average price increased to $348,300, the Department of Commerce said today.

On Wall Street trading, Tollbooth Strategy Index gained 0.4% or 42.42 to 10,720.47.

S&P 500 index edged up 0.11 or 0.01% to 2,115.61 and the Nasdaq Composite Index rose 5.45 or 0.1% to 4,973.62.

Crude oil fell $1.35 a barrel to $48.46 and gold fell $5.90 to $1,199 an ounce.

U.S. Movers

Lowe''s Companies, Inc (LOW) slid 16 cents to $74.49 after the home improvement retailer said net sales in the second-quarter ending on January jumped 7.5% to $12.54 billion from a year ago period.

Net income in the quarter soared 47% to $450 million or 46 cents per diluted share compared to $306 million or 29 cents from the same quarter last year.

TJX Companies Inc (TJX) gained 1.3% or 90 cents to $68.06 after the apparel and home fashions retailer stated sales in the fourth-quarter ending in January climbed 6% to $8.3 billion from a year ago period. Comparable store sales in the quarter jumped 4%.

Net income in the quarter surged 11.3% to $648 million or 93 cents per diluted share compared to $582.3 million or 81 cents from the same quarter last year.

Target Corporation (TGT) fell 51 cents to $76.44 after the discount store operator reported sales in the fourth-quarter ending in January jumped 4.1% to $21.8 billion from a year ago period. Comparable store sales in the quarter climbed 3.8%.

Net in the quarter swung to a loss of $2.64 billion or $4.10 per diluted share compared to profit of $520 million or 81 cents from the same quarter last year.

European Markets

In London trading, FTSE 100 index slipped 0.5% or 34.23 to 6,915.40 and in Frankfurt the DAX index slid 0.09% or 9.58 to 11,196.16.

In Paris, CAC 40 index fell 0.3% or 14.50 to 4,871.94.

AP Moeller - Maersk A/S soared 8.3% to 14,600 kronor after the Denmark-based shipping and oil company reported revenues in the year ending in December edged up 0.4% to $47.57 billion from $47.39 billion a year ago period.

Net profit in the year surged 45.5% from a year ago to $5.02 billion compared to $3.45 billion and diluted earnings per share jumped to $230 from $158.

The company forecasted underlying profit for the year to be slightly below $4 billion from $4.1 billion in fiscal 2014.

Separately, the company plans to divest 20% stake in Danske Bank and pay out the proceeds of about $5.5 billion in dividend.

Bouygues SA rose 0.4% to €35.60 after the France-based conglomerate said sales in the year ending in December were nearly flat at €33.14 billion from €33.12 billion a year ago period.

Net in the year swung to a profit from a year ago to €807 million compared to a loss of €757 million and diluted earnings per share swung to €2.39 from diluted loss per share of €2.26.

The company added sales in France dropped 4% to €21.3 billion and sales from the telecom segment declined 5% to €4.43 billion while sales from construction business jumped 2% to €26.5 billion.

The company maintained its dividend of €1.60 per share, unchanged from 2013.

Asian Markets

Nikkei index in Tokyo edged lower from its recent 15-year high and the yen weakened. Mitsubishi Heavy is likely to win a large offshore wind farm order in the U.K. Sankyo declined after the pachinko game machine maker lowered fiscal year sales outlook.

Stocks in Tokyo closed down but not far from the recent 15-year high and the yen weakened against the dollar and the euro.

Investors paid attention to the latest comments from the U.S. Federal Reserve Chair Janet Yellen and speculated that interest rates are likely to remain low at least in the first-half.

Yellen in her testimony to lawmakers offered an upbeat assessment of the economic recovery but also added that though the jobs market is healthier and recovering but not fully “healed.”

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc