Markets declined slightly in afternoon trading, given little progress on the fiscal cliff and uninspiring news from homebuilders. The National Association of Home Builders/Wells Fargo Housing Market Index rose to 47 in December from 45 in November, but that still doesn't indicate that a majority of builders feel optimistic about the market. In another report, U.S. housing starts fell 3% in November to a seasonally adjusted level of 861,000 annually. This is 22% higher than it was a year ago, so there's strong growth in the industry, but momentum may be slowing as we careen toward the fiscal cliff.
The so-so housing numbers have failed to give investors confidence in the markets, and with 30 minutes left in trading, the Dow Jones Industrial Average (^DJI 0.44%) is down 0.42%, while the S&P 500 (^GSPC 0.46%) has fallen 0.47%.
Companies that benefit from the housing sector have been the hardest-hit today. Alcoa (AA +0.00%) and Home Depot (HD 0.82%) are down 3% and 1.4%, respectively, while Bank of America (BAC 0.11%) has slipped about 1.3%. These stocks have surged recently on the improvement in housing, and now that numbers seem to be leveling off, investors are getting concerned. I think some of the slowdown may be due to the fiscal cliff and concern about a recession, so this could be a valley before the recovery of housing gains momentum in 2013.
On the plus side, Intel (INTC +0.61%) rose 0.7% after agreeing to sell its stake in Clearwire (NASDAQ: CLWR) to Sprint (NYSE: S). The mobile operator agreed to buy the company for $2.2 billlion, and both Intel and Comcast agreed to sell their significant stakes in the company. Now, SoftBank just needs to come through on its $20.1 billion stake in Sprint to make the rest of the acquisition complete.
