Sales of existing U.S. homes unexpectedly fell last month for the first time since March, signaling the housing recovery will be slow to gain speed.
Purchases dropped 2.7 percent in August to a 5.1 million annual rate, the second-highest level in the last 23 months, the National Association of Realtors said today in Washington. The median price dropped 12.5 percent from August 2008. A government report showed unemployment claims declined.
This number was not only surprising but somewhat inexplicable. Sales have been boosted by the first time homebuyer's credit and rates were still relatively low in August. It's yet another number to watch as we guage to recovery that all the so called experts say is beginning now.
In any case, that number drove the three indices down yesterday. The NASDAQ was down 1.12%, the S&P was down .95%, and the Dow was down .42%. The Dow which reached above 9900 following the Fed minutes announcement on Wednesday will likely test 9600 sometime today. This morning futures are down slightly further. Research in Motion, maker of the Blackberry, came out with its quarterly earning and they were disappointing. That's also weighing down on the tech heavy NASDAQ this morning. The University of Michigan consumer confidence index for August will come out just before 10 AM Eastern Time.
Meanwhile, Treasury bonds continue their intermediate term rally. The ten year U.S. Treasury bond is now at 3.37%, the lowest it's been in weeks. The spread between the two and ten year has also tightened to 2.40%. Oil has dropped precipitously over the last few days as well. It's currently trading at $65.55 a barrel. That's down about $7 a barrel from recent highs.
Both Europe and the Far East were both down nearly across the board. In the Far East the Hang Seng was down .13%, the NIKKEI in Japan was down 2.64%, and the Straits Time Index in Singapore was down .17%. Meanwhile, in Europe, things were only slightly better. The FTSE was up .2%, the DAX in Germany was down .43%, and the Spanish index was down .74%. The Italian index was up .18% however that, along with the FTSE, were the only two European indices that were up.
The Dollar, meanwhile, is somewhat mixed this morning. It's up .05% against the Euro, up .64% against the British Pound, and it's down by .98% against the Yen.