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We're now halfway through the week and the Dow Jones Industrial Average (INDEX: ^DJI ) has hardly moved a smidgen. For the day, it was up a meager 13 points, or 0.10%. Despite its apparent apathy, there were nevertheless three important pieces of news to hit the wire today.
1. Oil's suspicious decline
Since the beginning of the week, the price of oil futures has suspiciously declined a staggering 8%, from $99 on Monday down to $91.80 at the end of trading today.
A closer look reveals that it ratcheted down in two separate but brief instances. It fell off a proverbial cliff on Monday, dropping from $98.68 at approximately 2:18 p.m. ET down to $95.53 at 2:43 p.m., a decline of 3.2%. It then did roughly the same thing today, dropping from $96.07 at approximately 4:45 a.m. ET down to $91.43 at 2:07 p.m., a 4.8% dip.
The declines followed comments out of Saudi Arabia that it wants to see lower prices and is accordingly intent on keeping its output high. Also, earlier in the week, traders began speculating that the White House may release oil from the Strategic Petroleum Reserve to spur the economy. According to an article on MarketWatch.com, White House officials said today that they are monitoring oil markets and that "the president insists all options for dealing with [high oil prices] remain on the table," including a release from the SPR.
2. Housing's nascent recovery
Aside from oil's decline, consumers had another reason to cheer today, as more evidence of a nascent housing recovery emerged.
Early this morning, the U.S. Commerce Department released data showing that construction of single-family homes reached its highest level in more than two years. According to the report, single-family housing starts rose by 5.5% in August compared with July. Total housing starts, which includes construction of multifamily structures, were up 2.3% last month. The news led my colleague John Divine to note, "Housing may finally be driving growth in the American economy again."
A report from the National Association of Realtors has since bellowed the flames. It revealed that sales of previously owned homes rose in August by 7.8% from July to their highest level in 27 months. Additionally, the national average existing-home sale price rose by 9.5% on a year-over-year basis, marking the sixth consecutive month of price increases.
In response to this news, shares of Home Depot (NYSE: HD ) led the Dow higher, closing up by 1.04%. The home improvement retailer was second to only Disney (NYSE: DIS ) , which closed up 1.54% after it was announced that J.C. Penney will open more than 500 Disney-themed boutiques in its stores throughout the country.
3. Japan's central bank starts the presses
The final piece of news fueling the Dow today was the Bank of Japan's revelation that it will expand its ongoing bond-buying program from 70 trillion yen to 80 trillion yen, an increase of approximately $126 billion.
As I discussed earlier today, many commentators see the move as a reaction to similar measures in the West, most notably the United States and Europe. Following the announcement, the yen traded lower by more than half a percent. Needless to say, this will come as a relief to any and all Japanese manufacturers that sell goods abroad.
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