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Dow Futures Slip as Microsoft Hunts for a New Boss

Demitrios Kalogeropoulos
August 26, 2013

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

The Dow Jones Industrial Average (DJINDICES: ^DJI) is poised to start the week in the red. Stock futures as of 7:40 a.m. EDT suggest a modest 19-point dip at the opening bell as the guessing game continues over when the Federal Reserve might begin tapering its bond-buying program.

Overnight, Asian markets rose as new economic data out of China pointed to stronger economic growth. The Shanghai Composite index leapt 1.9% after the government said the world's second-largest economy is set to meet its 7.5% annual growth target this year.

Is it bad news or good news?
But weaker housing-market data in the U.S. has Wall Street speculating about the Federal Reserve again. The Census Bureau said on Friday that the pace of new-home purchases fell to 394,000 in July, well below the 490,000 that economists had expected. New weakness in the housing market might keep the Federal Reserve from scaling back its bond-buying program.

While many news sites reported that home sales had "plunged," that's an exaggeration. Yes, the housing data showed a 13.4% fall from June to July. However, this report comes from a survey with a small sample size, which is why big revisions to the data are common. This month's figure came with a 14.5% standard error, meaning that home sales could possibly have fallen by as much as 28% month to month -- or they could have even risen slightly.

Instead of trying to read foggy signals like that, investors should look for businesses that can benefit from the slow but steady recovery in housing. Home Depot (NYSE: HD), for example,