April 23nd 2014 – Stocks Slip on Disappointing Home Sales and Profit Taking

Market View:

As I had mentioned yesterday, it was pretty obvious that some sort of profit taking was going to come today.  Still, the broader market held up well, with only the Nasdaq feeling more heat as has been the case for most of this year so far.  More upside around the corner I think.  We now may see a recovery in the Nasdaq tomorrow, but that may depend on what Facebook has to offer in terms of earnings after the bell!

Market News:

U.S. stocks declined on Wednesday, with Wall Street retreating after a sixth day of gains for the S&P 500 and Nasdaq, after data had new home sales declining in March and companies including Boeing and AT&T reported quarterly results.

The Dow Jones industrial average and S&P 500 posted minor losses while the Nasdaq was solidly in the red amid more biotech struggles.

The Nasdaq is still negative for the year and the month of April as investors have soured on tech stocks.

Wall Street lost more ground after the government said new home sales tumbled 14.5% in March to the slowest pace since July. However, median prices of new homes sold rose to a record high of $290,000.

The weaker-than-expected housing numbers led investors to sell shares of home builders such as Lennar (LEN) and KB Home (KBH), which lost 2% and 4%, respectively. Stocks related to home construction also took a hit, including Home Depot (HD, Fortune 500) and Owens Corning (OC, Fortune 500), which makes insulation products and roofing shingles.

Also on the economic front, research firm Markit said the speed of U.S. manufacturing expansion slowed slightly in April. The data is preliminary until the end of the month.

Asian markets closed with mixed results after the latest survey of manufacturing activity showed China’s factories continued to struggle in April.

But there was a silver lining in the PMI report, according to analysis from Capital Economics, which said “while conditions in the manufacturing sector continue to weaken, they are no longer deteriorating as rapidly as before. It adds to growing evidence that, with infrastructure investment picking up, the recent slowdown in economic activity has begun to moderate.”

Both of the main stock markets in China were lower, while the benchmark Nikkei in Tokyo jumped by 1.1%

News Sources:  CNBC and CNN Money