U.S. stocks dropped after data showing housing starts surged to a seven-year high bolstered speculation the Federal Reserve may raise interest rates this year.
The S&P 500 (INDEXSP:.INX) slipped 0.1 percent to 2,126 at 3:48 p.m. in New York. The 30-company Dow Jones Industrial Average (INDEXDJX:.DJI) was flat at 18,300, while the tech-heavy Nasdaq Composite (INDEXNASDAQ:.IXIC) skidded 0.2 percent to 5,066.
DATA:
Housing starts jumped 20.2 percent to a 1.14 million annualized rate, the most since November 2007, from a 944,000 pace in March, a Commerce Department report showed today in Washington. The median forecast of 83 economists surveyed by Bloomberg was 1.02 million. More permits, a proxy for future construction, were issued than at any time since June 2008.
An improving labor market and mortgage costs close to multi-year lows are reviving residential construction, a sign that the weakness in early 2015 was probably due to harsh winter weather.
That backs the Federal Reserve’s view that a slowdown in first-quarter economic growth was likely temporary, as policymakers debate the timing of raising interest rates. Minutes from the Federal Reserve’s April meeting will be released tomorrow.
MOVERS:
Wal-Mart (NYSE:WMT) fell 4.5 percent to $76.30 after the world’s largest retailer’s first-quarter profit and sales fell short of expectations.
Home Depot (NYSE:HD) fell 1.5 percent to $112.61, erasing an earlier gain. The home-improvement retailer posted a rise in first-quarter earnings and sales. It raised its sales guidance for fiscal 2015 and said it would buy back another $3.4 billion in shares over the rest of that year.
Urban Outfitters (NASDAQ:URBN) slumped 16.3 percent to $34.06 after the specialty retail company reported quarterly sales that fell short of market estimates.
Dick's Sporting Goods (NYSE:DKS) slipped 5 percent to $53.54 as the sporting goods retailer’s comparable-store sales increase of 1 percent was shy of the 1.5 percent consensus.
Royal Caribbean Cruises (NYSE:RCL) advanced 1.9 percent to $77.17 after JPMorgan Chase upgraded the cruise line operator's stock to "overweight" from "neutral."
TJX (NYSE:TJX) advanced 3.1 percent to $69.34 after raising its annual guidance and reported that its earnings rose 4.5 percent on better-than-expected sales and improved margins during the quarter ended in April.
Take-Two Interactive Software (NASDAQ:TTWO) jumped 18.1 percent to $28.65 even as the videogame maker reported that its fiscal fourth-quarter loss widened and issued a weak outlook that missed Wall Street’s expectations.
Agilent Technologies (NYSE:A) was down 0.8 percent after the measurement company reported second-quarter earnings and revenue fell.
MBIA (NYSE:MBI) sank 8.3 percent to $9.00 after Warburg Pincus LLC, the largest holder of MBIA’s stock, said it will reduce its stake by more than half.
Medtronic (NYSE:MDT) rose 1.1 percent to $78.50 after the medical technology company said it expects earnings in its April quarter to come in at the top end of its previous guidance.
COMMODITIES:
Gold for June delivery on Comex dropped 1.7 percent to settle at $1,206.70 an ounce.
June crude fell 3.7 percent to settle at $57.26 a barrel on the New York Mercantile Exchange.