Wall Street loses steam after weak new home sales

By @ibtimes on

The Dow and the S&P 500 barely budged on Wednesday, as the indexes pulled back from early gains after data showed new home sales fell unexpectedly in November.

On the last full trading day before the Christmas holiday, the Commerce Department said new home sales in November sank 11.3 percent to an annual rate of 355,000 units, a seven-month low. A recovery in the housing market is considered crucial for the U.S. economy to sustain its rebound from a severe recession.

Thursday's trading will be an abbreviated session, ending at 1 p.m. for Christmas Eve.

The final December reading on consumer sentiment from the Reuters/University of Michigan surveys and November personal spending also came in weaker than expected.

The data was a bit lower than expected across the board, said Cleveland Rueckert, market analyst at Birinyi Associates Inc in Stamford, Connecticut.

There's going to be bumps on the road -- the market will be able to take it in stride. It seems like it's doing so today.

Home builders' stocks slid after the new home sales data, with Ryland Group Inc off nearly 2 percent at $20.10. The Dow Jones U.S. Home Construction index <.DJUSHB> was up 0.2 percent, reversing an earlier decline, a day after jumping 3.9 percent on better-than-expected existing home sales.

The Dow Jones industrial average <.DJI> shed 1.44 points, or 0.01 percent, to 10,463.49. The Standard & Poor's 500 Index <.SPX> edged up 0.98 of a point, or 0.09 percent, to 1,119.00. The Nasdaq Composite Index <.IXIC> gained 10.74 points, or 0.48 percent, to 2,263.41.

The Nasdaq remained in positive territory on the tech sector's strength a day after Micron Technology Inc and Red Hat reported better-than-expected quarterly profits.

Micron rose 5 percent to $9.88, while Red Hat advanced 4.4 percent to $31.18, both in NYSE trading. Among the Nasdaq's stalwarts, shares of iPod and iPhone maker Apple gained 0.6 percent to $201.59.

Energy stocks moved higher, as U.S. oil futures rose 2.7 percent, or $1.98, to $76.38 per barrel after data from the Energy Information Administration showed U.S. crude oil inventories fell more than expected last week as imports declined.

The PHLX Oil Service index <.OSX> shot up 1.2 percent, lifted by Schlumberger Ltd , which rose 2.2 percent to $65.36 after Barclays Capital raised its rating on the oilfield services company to overweight from equal-weight.

(Reporting by Chuck Mikolajczak; Additional reporting by Ellis Mnyandu; Editing by Jan Paschal)

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