Stocks drop after home sales fallNEW YORK — Stocks fell for a fourth day after another disappointing report on housing deepened worries that the economic recovery could be fading. Bond yields fell as investors sought out more stable investments.
By: By Stephen Bernard, The Associated Press, The Jamestown Sun
NEW YORK — Stocks fell for a fourth day after another disappointing report on housing deepened worries that the economic recovery could be fading. Bond yields fell as investors sought out more stable investments.
The Dow Jones industrial average lost 134 points Tuesday following news that sales of previously occupied homes fell last month to their lowest level in 15 years. The 27 percent drop in home sales from the previous month was the biggest since record-keeping began in 1968.
The Dow dipped briefly below 10,000 for the first time in seven weeks and has now lost 375 points since its four-day slump began. The yield on the two-year Treasury note reached another record low as cautious investors piled back into the bond market.
The National Association of Realtors said sales of previously occupied homes plunged in July to an annual rate of 3.83 million, much worse than the 4.7 million estimate from economists polled by Thomson Reuters.
Home sales have fallen sharply since a homebuyer tax credit expired at the end of April, despite mortgage rates reaching record lows. A stubbornly high unemployment rate of 9.5 percent has been keeping home sales down, and banks have also been cautious in making new loans.
“Without a boost in job creation, (buyers) just won’t have the confidence to step in and buy a new home,” David Katz, principal at Weiser Capital Management said.
Other world markets also fell. Japanese stocks led the way lower, falling more than 1 percent as the yen hit a fresh 15-year high against the dollar. Japan’s economy relies heavily on exports, so a stronger yen hurts the profits of major Japanese companies.