Stocks slammed on the breaks yesterday, bringing the Dow Industrials down 78 points, the Nasdaq down 12, and the S&P 500 down 10. Investors were concerned about slowing global growth, with China’s factory activity contracting.
There were similar concerns in France and Germany, casting worries on positive U.S. economic news that jobless claims fell to a four-year low of 348,000 last week.
This morning’s attention turns to sales of new homes. It’s a smaller market than previously-owned homes, but the recent housing trend has been our friend. Earlier this week, the National Association of Retailers said sales of existing homes in January and February were the strongest since 2007. Bank of America Merrill Lynch said in a research note yesterday that housing prices are expected to rise this year, albeit modestly, but the rise may suggest that prices have bottomed.
What’s also rising is mortgage rates; Freddie Mac puts the 30-year fixed rate at 4.08%, the first tick above 4% since October.
For now, stock futures are looking a bit softer; Dow futures are lower by 20 and futures on the S&P 500 are down just over a point.
And remember Etch a Sketch, the toy that lets you draw pictures using knobs and erase those pictures by shaking the device? It’s become an unexpected metaphor for the presidential election after Mitt Romney adviser Eric Fehrnstorm said the start of the election can be compared to an Etch a Sketch. Soon after, GOP contenders Newt Gingrich and Rick Santorum started using the device to describe Romney’s policies as a flip flopper.
Etch a Sketch is made by a very thinly traded company called Ohio Art, whose stock has skyrocketed as much as 212% this week.