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GLOBAL MARKETS-U.S. stocks slip, bonds rise as home
sales slow
Tue Aug 23, 2005 6:42 PM ET
(Adds closing U.S. market
activity, changes dateline from previous LONDON, new byline)
By Phil Berlowitz
NEW YORK, Aug 23 (Reuters) - A drop in U.S. existing home sales raised
concerns about consumer and mortgage lending on Tuesday, depressing
stocks, especially those of financial services companies, but pushing up
the prices of Treasuries.
A report by the National Association of Realtors showed sales of
previously owned homes slowed more than expected in July to a seasonally
adjusted annual rate of 7.16 million units.
Housing has been a key engine of U.S. economic growth, so a hint of
softening in the sector was enough to boost bond prices out of their
recent range, pushing yields to a one-month low.
Shares in Citigroup Inc. (C.N: Quote,
Profile,
Research),
the world's largest financial institution, dropped 1.5 percent or 64 cents
to $43.56, while the Philadelphia KBW Bank Index fell 0.9 percent.
Citigroup, a Dow component, also fell as the company said Marjorie Magner,
its consumer banking chief, will leave.
An index of home-builder shares fell 1.1 percent.
"Stocks have been losing steam as a result of higher rates and higher
energy prices," said Carl Birkelbach, president of Birkelbach Management
Corp. in Chicago, with $200 million in stocks. "We could see a continued
correction in prices from now until the next earnings season."
The Dow Jones industrial average slid 50.31 points, or 0.48 percent, to
end at 10,519.58. The Standard & Poor's 500 index dropped 4.14 points,
or 0.34 percent, to finish at 1,217.59. And the technology-laced Nasdaq
Composite Index fell 4.16 points, or 0.19 percent, to 2,137.25.
NYMEX crude oil for October delivery, the new front-month futures
contract, rose 6 cents to settle at $65.71, after earlier swinging from a
session low of $64.65 to an intraday high of $66.10 -- just $1 below the
record for NYMEX crude that was reached on Aug. 12.
Shares of other U.S. banks, including Bank of America Corp. (BAC.N: Quote,
Profile,
Research),
fell. Bank of America lost 0.9 percent to $43.34.
Shares of the No. 1 U.S. home builder, D.R. Horton Inc. (DHI.N: Quote,
Profile,
Research),
dropped 0.4 percent or 15 cents to $34.92 and the No. 2 home builder,
Pulte Homes Inc. (PHM.N: Quote,
Profile,
Research),
fell 0.8 percent, or 68 cents, to $83.48. Continued
...
© Reuters 2005. All Rights
Reserved.
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