Housing woes down Russell 2000
The Russell 2000 (NYSE: IWM) has lost steam following news of a steeper-than-expected decline in pending U.S. home sales.
At 11:53 a.m. ET, the small-cap index had added 0.60 points, or 0.09%, to 693.09. The Dow Jones Industrial Average (INDU) was down 22.68 points, or 0.19%, to 12,177.42.
Pending home sales fell 1.5% in December, the National Association of Realtors reported after the opening.
The Washington, D.C.-based trade organization’s pending home sales index fell to a reading of 85.9 from a downwardly revised level of 87.2 in November. Economists were expecting the measure to decline 1%.
The December 2007 level is 24.2% below the year-earlier level. For of all 2007, the index is at it lowest level ever.
“Existing-home sales have moved narrowly since last September, but when the full impact of higher loan limits for conventional mortgages begins to impact the market there is likely to be a notable rise in home sales and prices,” said NAR chief economists Lawrence Yun in a statement.
News of the decline hit small-cap stocks, which dropped from their morning high above 700 points at about 10:30 a.m. ET and briefly entered negative territory at about 11 a.m. ET.
In other economic news, the day began with news that of weak January sales at U.S. retailers.
Small-cap specialty fashion retailer The Wet Seal, Inc. (Nasdaq: WTSLA) reported that January same-stores sales declined 5.7%, worse than was expected.
Also taking a hit was Charlotte, N.C.-based The Cato Corp. (Nasdaq: CTR), which saw its same-store sales fall 2% despite discounts.
Similarly, New York and Company, Inc. (NYSE: NWY), which also sells women’s fashion, reported that same-store sales declined 3.5% in the fourth-quarter and 1.3% for the entire year.
