It's been an up and down day on Wall Street as traders can't seem to find a good reason to send stocks significantly higher or lower. The Dow Jones Industrial Average (DJINDICES:^DJI) is up a microscopic 0.01% near the end of trading, and the S&P 500 (SNPINDEX:^GSPC) is down 0.22%. The economic news was mixed today, so there wasn't anything for either bulls or bears to grab on to.
The National Association of Home Builders-Wells Fargo homebuilder sentiment index was released today, and it showed homebuilder confidence at a six-year high. Builders are seeing sales levels not seen since July 2006, and prospective buyers are back at levels not seen since May 2006. The housing market has been in a state of flux for six years now, but confidence is slowly returning to the market, which should be a great sign for the economy.
You might think that a stronger housing sector would be good for banks and raw-material suppliers, but they're leading the Dow decliners today. Bank of America (NYSE:BAC) and Alcoa (NYSE:AA) have both fallen more than 1% as the hangover of the QE3 pop they saw last week leaves investors in selling mode. In the long term, a stronger economy and housing sector should be a positive, so I wouldn't look at today's oversized drop as anything more than a reaction from the recent run-up.
FedEx (NYSE:FDX) had a different take on the economy's state, lowering profit forecasts and raising concern that an economic slowdown will impact demand.
Oil continued a decline that started with a sharp sell-off yesterday. A barrel of oil fell 1.4% to $95.31 in late trading as investors look toward a Department of Energy inventory report on Wednesday. Supply is expected to increase in part due to Hurricane Isaac hitting the Gulf of Mexico.