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Buoyed by Microsoft's (NASDAQ:MSFT) big gains, the Dow Jones Industrial Average (DJINDICES:^DJI) battled back today to finish the week north of 15,000, climbing 47 points, or 0.3%. The blue chips briefly dipped into the red after the day's only economic report revealed July new home sales dropping 13.4% to an annual rate of 394,000, way below expectations of 485,000. June's new home sales figure was also revised lower by 42,000 to 455,000. The decline comes as interest rates have jumped more than 1% since the Federal Reserve began indicating that it would reduce its stimulus program, bringing mortgage rates up along with it and threatening the housing recovery. The number of homes up for sale also increased last month, a further sign that demand is slowing. Homebuilder stocks including Lennar, Toll Brothers, and KB Home were all down 2.7% or more.
Back on the Dow, Microsoft shareholders were wishing their CEO would retire every week after the stock jumped 7.3% on CEO Steve Ballmer's announcement that he will leave the company within the next 12 months. Ballmer has steered the software stalwart since 2000, delivering only middling returns for investors as the tech giant has been huffing and puffing to keep pace with Apple and Google as mobile technology has become dominant. In his statement, Ballmer said he was leaving the company as it begins to transition into becoming a devices-and-services company, rather than a software maker, as the relevance of Windows and Office products becomes diminished with the rise of mobile. Ballmer said he didn't want to leave Microsoft in the middle of that shift and will step down once a new CEO is named.
Elsewhere, the Dow's two telecom stock were standouts, both gaining 1.4%. With the new iPhone set to come out in two weeks, AT&T (NYSE:T) was up today as news outlets reported that Ma Bell will release a refurbished iPhone 3GS to its prepaid Go Phone members, a move that could open up a new revenue stream and tap into its newfound pool of Cricket prepaid subscribers as wireless competition intensifies. Verizon (NYSE:VZ), meanwhile, moved up after extending an agreement with CBS to offer its programming on Verizon's FIOS Cable-TV network. The addition may be put pressure on cable provider Time Warner, which has blocked CBS programing for the past several weeks over a bitter payment dispute. The Verizon deal could also lure customers away from Time Warner.
Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.