- The Washington Times - Tuesday, May 19, 2009

UPDATED:

Wall Street closed Tuesday with mixed results, following news of record-low home construction in April.

The Dow Jones Industrial Average closed at 8,474.85, down 29.23 points. The broader Standard & Poor’s 500-stocks Index closed at 908.13, down 1.58 points, and the tech-heavy NASDAQ closed at 1,734.54, up 2.18 points.

The Commerce Department reported construction for new homes and apartments fell 12.8 percent in April compared with March, the worst decline in roughly 50 years. The construction of single-family homes increased by 2.8 percent compared with March, but record-low construction for apartments resulted in an overall drop. In addition, the number of building permits in April decreased 3.3 percent compared with March.

The report was followed by Home Depot, the world’s largest home-improvement retailer, announcing that first-quarter profits increased by 44 percent compared with the similar period last year.



The Atlanta-based company attributed the gains to the closing of its Expo Design Centers. However, quarterly sales dropped 10 percent compared with the first quarter of April 2008. The company also projected that sales would be down 9 percent for the year.

Home Depot stock closed at $24.63, down $1.39.

Also on Monday, the Senate voted to prevent credit-card companies from increasing interest rates for nondelinquent customers and charging excessive fees. President Obama could sign the bill by the end of the week.

American Express Co. stock fell $1.21, to $24.92.

Home Depot’s announcement came a day after Lowe’s Cos., the country’s No. 2 home-improvement retailer, said first-quarter profits were $476 million — 21.6 percent less than in the similar period last year but meeting analysts’ expectations.

With the help of a report that builders increasingly are confident about the value of single-family homes, U.S. markets rose 3 percent Monday, with the Dow gaining 235 points and recovering most of last week’s losses.

The markets are up more than 30 percent since hitting a 12-year low in early March — largely because of a favorable government report on the health of major U.S. banks and first-quarter bank earnings that exceeded analysts’ expectations.

Investors now have focused their attention on economic reports — including those from the housing industry — that show the economy is not recovering as fast as had been hoped and that the recession that began in December 2007 will continue until at least the end of the year.

Last week, the online company RealtyTrac reported the number of foreclosures nationwide increased by 1 percent in April compared with the previous month and by 32 percent compared with the similar period last year. And the National Association of Realtors reported nearly 90 percent of metropolitan areas reported a decrease in the price of single-family homes during the start of 2009.

The Dow last week fell 3.57 percent. The S&P fell 4.99 percent, and the NASDAQ fell 3.38 percent.

Overseas on Monday, Japan’s Nikkei stock average rose 2.78 percent, Britain’s FTSE 100 rose 0.81 percent, Germany’s DAX index rose 2.22 percent, and France’s CAC-40 rose 0.91 percent.

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