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The Dow Weighs Housing's Mixed Message

Dan Caplinger
July 22, 2013

During earnings season, it's easy to lose sight of the macroeconomic factors that tend to dominate stock market trading between quarterly reports. Yet despite today's big drop from McDonald's following an unfavorable earnings report, part of the reason the stock market is losing a bit of ground this morning is the mixed news from the housing sector. Sales of existing homes fell 1.2% to 5.08 million annually, disappointing those who had expected a substantial gain. Still, the median price of homes sold jumped 13.5%, pointing to the continuing bounce in home prices we've seen take shape over the past year. That conflict left investors searching for direction, and as of 10:45 a.m. EDT, the Dow Jones Industrials (INDEX: ^DJI) were up about two points, with broader markets also showing mixed results.

Within the Dow, one of the best barometers of the housing market is Home Depot (NYSE: HD). With its finger on the pulse of consumers seeking to make renovations to their existing homes, as well as contractors that both help make those renovations and construct new homes, Home Depot's stock has soared to all-time record high levels recently. Today's slight 0.1% gain supports the conclusion that investors aren't pan