Industrials Rack Up Gains

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Industrials ended up Wednesday, as investors absorbed new data from payroll processor ADP indicating that 162,000 new private-sector jobs were created last month, well above the 153,000 analysts expected. The Bureau of Labor Statistics is scheduled to deliver its own figures on Friday. Homebuilders in particular surged on further evidence that a housing recovery is under way. A sharp fall in oil prices also buoyed the transportation sector.

Wednesday saw most major homebuilders advance more than 6% after the Mortgage Bankers Association announced that weekly mortgage applications jumped 16.6% in the final week of September, up from a 2.8% increase the week before. This lends support to the idea that QE3, the Federal Reserve's latest round of pushing down rates by purchasing mortgage-backed securities, is actually working to make home buying more attractive.

Hovnanian Enterprises (NYSE: HOV  ) led the pack, gaining a whopping 12.2% in Wednesday's trading. Hovnanian also announced Wednesday that it's exercising an option to pay down over $600 million in debt early, which investors took as a sign of confidence.

Homebuilders aren't the only businesses to gain from a housing recovery: Manufacturers of products used in home construction and maintenance, as well as in residential infrastructure, were also up strongly on Wednesday. Pentair (NYSE: PNR  ) , a maker of flow control products for water infrastructure as well as filters and pumps used in building ventilation and water systems, was up nearly 3%.

Oil fell more than 4% Wednesday, good news for transportation companies that count fuel as a major expense. That sector's best performer was US Airways (NYSE: LCC  ) , up more than 8%. In addition to lower fuel costs, US Air announced Wednesday that its passenger load for September rose 0.8%. Other major airlines were up between 2% and 6%, anticipating similar good news.

Wednesday's worst performers were weapons manufacturers, as investors reacted to Benchmark analyst Mark Greene's finding that FBI background checks for weapon applications rose nearly 15% in September. That sounds like good news for arms makers, but growth in firearm applications has been more like 20% to 25% in recent months. Accordingly, despite declining 4.5% today, Smith & Wesson (Nasdaq: SWHC  ) is still up nearly 340% over the past 12 months.

Non-lethal weapons are subject to the same concerns over potential regulation: TASER International (Nasdaq: TASR  ) has outperformed the Dow Jones Industrial Average 40% to 26% over the past year. Like other weapons manufacturers, it fell today, down 2.3%. Today's decline may present a decent buying opportunity, if you think TASER is destined for greatness.

Concerns over the 2012 election are thought to be driving strong weapons sales. In his report, Greene wrote, "Before the election, people are buying firearms because they think that if re-elected, President Obama might go after more firearms regulation." Smith & Wesson CEO James Debney echoed that sentiment in June, saying that presidential politics were driving company returns.

Political issues can weigh heavily on investment decisions, but luckily for individual investors, The Motley Fool has put together a free report on how to profit from the election of either candidate. It's important to have an investing strategy in place well before the election, and this report is available for only a short time, so download your copy today.

Fool contributor Daniel Ferry has no position in any of the companies mentioned above. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2043080, ~/Articles/ArticleHandler.aspx, 10/24/2016 6:20:47 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:02 PM
HOV $1.63 Up +0.01 +0.62%
Hovnanian Enterpri… CAPS Rating: **
LCC.DL $0.00 Down +0.00 +0.00%
US Airways Group CAPS Rating: *
PNR $58.94 Up +0.57 +0.98%
Pentair CAPS Rating: ***
SWHC $26.80 Up +0.21 +0.79%
Smith and Wesson H… CAPS Rating: ****
TASR $23.54 Up +0.34 +1.47%
Taser Internationa… CAPS Rating: ****