Mixed Housing Data Has No Effect on the Dow

The National Association of Realtors released data this morning indicating that December's existing-home sales fell by 1% from November. While the month-over-month number decreased, December of 2012 beat December of 2011 by 12.8%. Fool John Maxfield believes this year-over-year increase was a result of three things: record-low interest rates, a lower supply of homes on the market, and cash-rich investors buying up homes with the hopes of turning a profit later down the road.

At this time is doesn't seem investors are too concerned about the slight drop in housing sales. As of 12:50 p.m. EST, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 30 points, or 0.22%, to 13,680. Eleven of the index's 30 components are trading lower so far, and three of those losers are Boeing (NYSE: BA  ) , Johnson & Johnson (NYSE: JNJ  ) , and Caterpillar (NYSE: CAT  ) .

So why are they down?
Shares of Boeing are again sinking today because of the company's troubled new 787 Dreamliner aircraft. Since the Federal Aviation Administration grounded all 787s in the U.S. last week, the company has been scrambling to find the problem that has now caused two separate incidents involving the plane's battery system. On Sunday regulators ruled out one simple explanation for the battery issues, which raises more concerns among investors over how long this delay will last. Currently there are only 50 787s in the hands of customers, but hundreds more have been ordered, and the possibility of canceled contracts rises every day this nightmare drags on. Shares of Boeing are down 1.3% today.

This morning Johnson & Johnson announced quarterly earnings that missed analysts' estimates. Johnson & Johnson was expected to earn $1.17 per share but only made $0.91. The company did report a much better quarterly report than it did this time last year, but that was largely due to some one-time write-offs the company took last year. Shares of Johnson & Johnson are down 0.65%.

Finally, shares of Caterpillar are down 0.8% after the company announced it had uncovered an accounting scandal at its China ERA Mining Machinery unit. Caterpillar acquired this manufacturer last year, and in an internal investigation, Caterpillar found that several managers had engaged in deliberate accounting irregularities for a number of years prior to the acquisition. It has also been announced that Caterpillar will take a $580 million charge for the company, which Caterpillar had bought for $800 million.

More foolish insight
Caterpillar is the market share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in our brand-new report. Just click here to access it now.


Read/Post Comments (0) | Recommend This Article (3)

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.

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: 2208201, ~/Articles/ArticleHandler.aspx, 9/15/2014 5:32:26 AM

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...


Advertisement