In a rare turn of events over the past five years, housing is helping push markets higher today. The Dow Jones Industrial Average (^DJI 0.08%) is up 0.34%, and the S&P 500 (^GSPC 0.13%) has moved 0.32% higher late trading.
Two housing reports were released today. One from the U.S. Department of Commerce said that housing starts rose 2.3% in August to 750,000, just short of estimates. But maybe more important is a report from the National Association of Realtors, which said that sales rose 7.8% in August to a seasonally adjusted annual rate of 4.82 million. This was well above estimates and may indicate a rebound in existing-home sales, which would be a great sign for the economy.
Japan also announced a $127 billion asset purchase program, which may have a slight impact on markets but is overshadowed by U.S. housing.
Home Depot (HD -0.47%) is leading the Dow higher on the home sales news, climbing 1.3% today, but the big winners today have been homebuilders. PulteGroup (PHM -0.59%) and D.R. Horton are both up 3.9% on hope that the increase in home sales will make its way to the new construction market. At this point, investors will take any good sign for housing and run with it.
Oil caused energy stocks to move lower today, continuing a trend that began earlier this week. Oil is down 3.5% on the day to $91.93, and this has led Dow component Exxon Mobil (XOM -0.50%) to sink 0.6%, leading the decliners. A report showing that U.S. crude inventories rose 8.5 million barrels last week caused the markets to worry about prices going forward. Analysts had expected a more modest 2.5 million barrel increase in inventory. To top it off, Saudi Arabia said it stood ready to increase production to keep prices reasonable for the global economy.
Lower oil prices should have a long-term positive impact on the economy, and so should a stronger housing sector. The market hasn't moved much higher, but those may be the two most bullish reports we've seen in weeks.
