Home sales strengthen small caps
The Russell 2000 (NYSE:IWM) and the Dow added to their earlier gains on news that existing U.S. home sales rose more than expected in February.
At 11:33 a.m. ET, the small-cap index was up 19.71 points, or 2.89%, to 701.13. The Dow Jones Industrial Average (INDU) had climbed 218.83 points, or 1.77%, to 12,580.15.
Sales of existing homes rose 2.9% to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, the National Association of Realtors reported after the start of trading. Economists were expecting to see a fall.
“We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” said NAR chief economist Lawrence Yun in a statement.
However, the median home price declined 8.2%.
The Russell 2000, which opened on a bullish note on news that JPMorgan Chase & Co. (NYSE:JPM) will improve its offer for Bear Stearns (NYSE:BSC) to $10 a share from $2 a share, reacted with an even steeper upward trajectory.
Shares of retail companies are currently the leading the industry group. Among the winners is Evansville, Ind.-based family footwear retailer Shoe Carnival, Inc. (Nasdaq:SCVL).
Genesco Inc. (NYSE:GCO), which retails branded footwear, is also seeing its shares rise.
On the flip side, The Finish Line, Inc.’s (Nasdaq:FINL) stock price is stagnant.
