Dow This Morning: Stocks Rise Despite Scary Housing Data

A plunge in housing starts isn't holding the Dow back this morning. Find out why.

Feb 19, 2014 at 11:00AM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Ordinarily, dour economic data can have a depressing effect on the stock market. Yet even after the Commerce Department said that housing starts in the U.S. plunged by 16% last month, their biggest drop since early 2011, the Dow Jones Industrials (DJINDICES:^DJI) had posted a gain of 72 points as of 11 a.m. EST. Home improvement retailer Home Depot (NYSE:HD) dropped slightly on the news, but gains from energy giants Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM) outweighed the downward impact from Home Depot's modest decline.

As we've seen with a number of other readings on the economy lately, weather almost certainly played a big impact on January's housing starts numbers. Even though seasonal adjustments already take into account the usual weather patterns that discourage starts in the winter months, last month's particularly cold temperatures appeared to play a particularly big role in the Midwest region, where starts fell by more than two-thirds. Yet a jump of more than 60% in the Northeast challenges that theory, and drops in other areas of the country where weather played less of a role point to underlying housing weakness.

Home Depot's drop of 0.8% follows a similar decline yesterday after sentiment among homebuilding companies plunged in February, according to the National Association of Home Builders. Weather was a factor there, too, but a lack of skilled labor and availability of building materials also created concerns about the state of the industry. Home Depot has a good mix of business from both contractors and homeowners, and anything that threatens its contractor business could undermine the impressive growth the stock has produced in recent years.

On the energy front, though, Chevron jumped 1.8%, while ExxonMobil climbed 0.7%. Prices of both crude oil and refined products have been on the rise lately, as high winter-related demand has started to impact longer-term projections for supplies. Some weather experts expect continued cold conditions in March, and that could lead to a delay in the point at which suppliers stop drawing down their stockpiles and start rebuilding them for the next season. Refiners are particularly benefiting from that trend, and with Chevron and Exxon both retaining their integrated refining operations, they stand to benefit somewhat here. In the long run, though, the question is whether the market will support $100 oil and $5 natural gas, as both companies' production divisions represent the biggest part of their revenues.

Make real money from energy
Exxon and Chevron are safe plays in the energy space, but the real money could come from smaller, more nimble companies. To help you find them, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Chevron and Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers