Markets are moving up today, as the S&P 500 and the Dow Jones Industrial Average (DJINDICES: ^DJI ) take off despite some disconcerting news about housing.
The National Association of Realtors released the scoop on pending home sales for October, and the results were disappointing. Pending sales declined for a fifth straight month, dipping 0.6% to put the index 1.6% lower than where it stood one year ago. The report noted that the government shutdown in early October was a factor, as the pace of paperwork on pending loans slowed due to a lack of communication with federal agencies including the IRS.
Despite the news, markets did not falter for long. The Dow rose quickly after the news, and is up 30 points at noon EST.
Banking sector quiet today
The big banks are doing fine on a quiet day, with both JPMorgan Chase (NYSE: JPM ) and Goldman Sachs well into the green so far. The lousy news from the housing sector might actually bode well for banks such as JPMorgan and former Dow component Bank of America (NYSE: BAC ) . If the housing market continues to slide, interest rates will likely drop; that may help goose the mortgage-loan market.
In addition, markets may see the housing data as reason to cheer, since it might prompt the Federal Reserve to hold off longer on tapering of quantitative easing. That, in turn, could lower rates even more, perhaps giving back to JPMorgan and Bank of America some of the home loan business that has become so scarce over the past several months.
JPMorgan Chase's $13 billion settlement with U.S. regulators continues to resonate, as the top lawyer for the big bank openly criticized the gargantuan penalties levied upon the sector at an event late last week in New York City. Attorney Stephen Cutler opined that government would be better off spending its time on matters other than pursuing the nation's biggest banks for crisis-era boondoggles -- even as federal regulators sat right alongside him during a panel discussion.
In other banking news, Fiat today announced that it will probably not launch a Chrysler initial public offering this year, despite speculation to the contrary. Bank of America and JPMorgan Chase are the lead underwriters on that deal, which will have to wait until the Italian car company and VEBA, the United Auto Workers' health care trust, can agree on a price at which the trust will sell its share of Chrysler stock to majority holder Fiat.