Bullishness Prevails – Market Recovers from Initial Shock on February New Home Sales
Today was an interesting day in the markets. The key event was the release at 10am EST by the Commerce Department of the report for February New Home Sales.
The report said that new homes sold at a seasonally adjusted rate of 848,000, 3.9% below January’s seasonally adjusted rate of 882,000, 18.3% below February 2006’s 1.038,00 and below economists’s expectations of around 1 million. Not only that, but January sales were revised down from 937,000 to the above mentioned 882,000. December and November were also revised lower.
What’s interesting is the market response. The market reacted dramatically to the downside upon the release of the numbers but spent the rest of the day recovering to the extent that the S&P actually ended the day in positive territory.
S&P 500 (blue line) and Homebuilder ETF (XHB) (orange line), Monday March 26