- Housing starts, permits disappoint
- Fed minutes due out later on
- Signet to buy Zale, shares
Dow Jones: 0.44%
S&P 500: 0.18%
Weaker-than-expected data from the US housing market failed to hold back Wall Street stocks on Wednesday, though a poor start on the Nasdaq has put its recent winning streak at risk.
The S&P 500
was trading 0.2% higher in morning trade, registering its fourth day in positive territory; the Dow Jones Industrial Average gained 0.4%; while the Nasdaq fell 0.2% following an eight-day climb.
The Commerce Department revealed that housing starts fell by 16% in January to a seasonally adjusted annual rate of 880,000 units, compared with a revised 1.05m-unit rate in December when they fell 4.8%. This was the worst percentage drop since February 2011 and well below the 4.9% fall expected by analysts.
Separately, building permits fell 5.4% in January to a 937,000-unit pace, down from the revised 991,000 in December when they declined 2.6%. Analysts had predicted a smaller fall to 975,000.
Analyst Michael Gapen from Barclays said that housing activity remains in a recovery phase, albeit at a slower pace due to the recent rise in mortgage rates.
"The weather-related distortions to activity are likely clouding an accurate view of where housing is at this point in the cycle. We expect that some of the softness in private residential construction will be reversed in the coming months, most likely in the second quarter," he said.
Meanwhile, mortgage applications retreated 4.1% in the week ended February 14th against a 2% slump the previous week.
Investors were also looking ahead to tonight's release of the latest Federal Reserve meeting minutes, which will shed further light behind the central bank's decision to scale back monthly asset purchases by a further $10bn to $65bn last month.
The meeting on January 28th to 29th was the last meeting held under former Chairman Ben Bernanke. New Chair Janet Yellen has indicated that the Fed is likely to continue tapering monetary stimulus after each policy meeting before ending it all together later in the year.
Fed officials Dennis Lockhart and James Bullard are also due to speak later today, potentially offering further clues as to Yellen's next move.
Signet, Zale surge after deal
Signet Jewelers rose strongly after agreeing to buy Zale Corp. for $21 a share, representing a 41% premium over Zale's previous closing price. The deal would value both companies at around $1.4bn.
Helca Mining advanced after saying its gold and silver reserves surged, mainly due to its acquisition of Aurizon Mines.
Zebra Technologies edged higher after the maker of barcode-label printers reported fourth-quarter revenue that exceeded analysts' estimates.
Chelsea Therapeutics International was up after winning approval in the US for its drug to prevent sudden drops in blood pressure.