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CNBC:
5/19/09 16:30 ET Dow -29.23 at 8474.85, Nasdaq +2.18 at 1734.54, S&P -1.58 at 908.13:
[BRIEFING.COM] A late selling effort caused stocks to close a choppy session in mixed fashion. The session's lack of direction followed disappointing housing data and a pullback by financial stocks.
News that housing starts and building permits recently fell below expectations jostled participants in the early going and undermined what was a positive bias ahead of the opening bell. Housing starts during April came in at an annualized rate of 458,000, while building permits for April hit a rate of 494,000. Both marked record lows.
However, the is a silver lining to the report. Fewer housing starts and building permits means there will be fewer homes on the market, which should help clear the glut of existing homes and improve pricing.
Contrasting its performance in the prior session, financials were the worst performing sector in the S&P 500. They finished 2.6% lower amid weakness in consumer finance stocks and banking stocks.
Consumer finance companies (-4.8%) saw their shares come under increased pressure following news that the Senate has passed legislation to place new restrictions on the credit card industry. Dow component American Express (AXP 24.79, -1.34) showed particular weakness, even though the company announced plans to save $800 million this year by slashing jobs, investments, and costs.
Diversified banks dropped 4.9% as participants shrugged off news that the Fed has expanded collateral eligible under its TALF to include high-quality commercial mortgage-backed securities in order to ease balance sheet pressures. The Fed's announcement was made in the wake of a report from The Wall Street Journal that suggested commercial real-estate loans could generate $100 billion in bank losses by next year.
Meanwhile, CNBC reported that TARP repayment announcements will not be made until after June 8, and that the Treasury will announce a process for auctioning TARP warrants in the next several days.
On a similar note, Financial Times reported that Britain has begun talks with sovereign wealth funds and other investors about selling stakes in its part-nationalized banks.
Health care stocks also traded as laggards. They finished with a 0.6% loss, though AmerisourceBergen (ABC 35.96, +0.38) showed strength after it announced better-than-expected earnings, raised its guidance, hiked its quarterly dividend by 20%, and issued a 2-for-1 stock split.
There weren't many earnings reports for participants to assess this session. However, Dow component Home Depot (HD 24.63, -1.39) did post better-than-expected earnings for the latest quarter. That wasn't enough to win the company favor among participants, though. The stock surrendered nearly all of its gains from the prior session, and traded as a laggard among retailers, which finished the session 0.3% higher.
Utilities made up the best performing sector by finishing 1.7% higher. The strong performance followed a flat finish in the prior session, and losses in the three preceding sessions.
Only a handful of companies are scheduled to announce earnings results ahead of tomorrow's opening bell. The minutes from the FOMC's April 29 meeting are due at 2:00 PM ET and should help provide investors with details regarding the Fed's quantitative easing efforts.
Nasdaq +2.18 at 1734.54... S&P Midcap 400 +0.2... NYSE Adv/Dec 1806/1219... Nasdaq Adv/Dec 1348/1315.
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