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By Jennifer Yousfi
Data from the National Association of Realtors offered hope that the housing slump might be stabilizing and helped the markets reverse losses in early-morning trading.
"We all know that real estate is mired in recession and it's probably going to stay there for awhile, but other sectors are not, and I think that's what the market is going to focus on," Peter Cardillo, chief market economist at Avalon Partners, told MarketWatch.
At noon ET today, the three major U.S. stock indices posted slight gains. The blue-chip Dow Jones Industrial Average Index inched ahead 27.68 points (0.22%), to trade at 12,408.70. The tech-laden Nasdaq Composite Index gained 1.96 points (0.09%), to reach 2,305.31. And the broader Standard & Poor's 500 Index eked out a 0.21-point increase (0.02%), to settle at 1,353.32.
The energy and healthcare sectors were up 0.95% and 1.06%, respectively, while the financial [down 0.13%] and services [down 0.04%] sectors posted the largest declines.
Existing home sales fell only 0.4% in January. While it marked the slowest pace since data started being tracked in 1999, it managed to beat expectations and provide some hope that the housing slump might be approaching its bottom. However, with inventories still high, a further reduction in prices seems likely.
"Sales are so low that a bottom seems to be in sight," wrote Joel Naroff, chief economist for Naroff Economics Advisors in a note to clients. "That cannot be said about prices."
Shares of airliner maker The Boeing Co. (BA) were the biggest percentage gainers among Dow industrials components today, after a Merrill Lynch & Co. Inc. (MER) analyst reiterated his "Buy" rating on the stock and made upbeat comments about both the aerospace company's new 787 Dreamliner and an order announced by RAK Airways.
Merrill Lynch analyst Ronald Epstein reiterated his buy rating on Boeing, saying the checks he conducted at the Singapore Air Show "suggest that the 787 program is making progress." Epstein still believes that the first flight of the troubled jet will occur this summer, and that it will enter service with key airlines a year later.
Epstein also said that he anticipates 2008 being a "big year" for Boeing's 747-8 Intercontinental airliner – a version of the 747 Jumbo Jet Boeing has built for decades. The analyst told Reuters that he believes there are six active sales campaigns, including three that could conclude this year.
Separately, Epstein said that RAK Airways – the fourth national airline of the United Arab Emirates, established in February 2006 – announced its first order for four new-generation 737-800s, with an option to buy 2 more. The deal is valued at $1.65 billion.
Boeing's stock was up 1.5% at $84.27. However, the shares are still down 3.6% since the end of 2007. Boeing is one of the so-called "Global Titan" stocks that Money Morning investment gurus believe will benefit from the ongoing global growth that is expected to continue for years to come.
In overseas markets, Japan's Nikkei Index surged over 3% with a gain of 414.11 points to close at 13,914.57. Hong Kong's blue-chip Hang Seng Index posted a slight loss of 35.90 points to close at 23,269.14.
Japan's Nikkei reached a six-week closing high based on reports that Chinese sovereign wealth funds are expected to invest as much as $10 billion in Japanese stocks.
"The next target will be whether the Nikkei is able to touch 14,000, but that will still depend on the outlooks for economic health and next year's earnings," Fujio Ando, senior managing director at Chibagin Asset Management, told Reuters.
At midday, the dollar had lost ground against the euro [down 0.074%] and the pound sterling [down 0.076%], but gained against the yen [up 0.821%].
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