Homebuilder Stocks Fall After Several Downgrades At Barclays

Homebuilder stocks slumped broadly Tuesday, after Barclays downgraded several of them, and reiterated a bearish view on some others, citing concerns that valuations suggest investors may be too optimistic in the face of data pointing to moderating buyer traffic trends. Toll Brothers Inc.'s stock shed 1.6% after analyst Michael Dahl downgraded it to underweight from equal weight, while shares of Lennar Corp. fell 1.5%, PulteGroup Inc. lost 0.6% and TRI Pointe Group Inc. dropped 1.7% after Dahl downgraded them to equal weight from overweight. Shares of KB Home slipped 0.2%, Meritage Homes Corp. gave up 0.8% and Realogy Holdings Corp. lost 0.3% after Dahl reiterated his underweight ratings. "Our June A.G.E.N.T. Survey indicated moderating buyer traffic trends, warning of risk that near-term catalysts for builders will disappoint relative to rising expectations," Dahl wrote in a note to clients. Separately, CalAtlantic Group Inc.'s stock bucked the sector's trend by rallying 0.8%, after Dahl upgraded it to equal weight from underweight, citing its recent underperformance relative to the group. The iShares U.S. Home Construction ETF , which was down 0.6% in morning trade, has run up 25% year to date, while the S&P 500 has gained 8.4% this year.