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The major headlines in the stock market today include: Housing prices continue to rise, consumer confidence strengthens and these two stocks are sending hints to investors.
- Housing prices boost stocks– The S&P Case-Shiller national home price index which measures 80% of the U.S. housing market rose 1.6% in July from the previous month. Prices reached levels not seen since the summer of 2003, before the housing market reached its peak. The index is up 1.2% from a year earlier and July marked the third straight month that prices improved in all 20 markets the index covers. Year-over-year 16 of the 20 cities saw rising prices led by Phoenix with a 17% increase. "All in all, we are more optimistic about housing," David Blitzer, chairman of the S&P index committee, said in a statement. "Stronger housing numbers are a positive factor for other measures including consumer confidence."
- Consumer confidence rises on job hopes– The consumer confidence index rose to 70.3 in September from August's 61.3 level. The index is at its highest level since February as consumers become optimistic towards jobs and the economy. The expectations index rose to 83.7 from 71.1 and the number of people who expect more jobs in the future increased to 18.5% from 15.8%. "That was a pretty strong reading," Eric Viloria, senior currency strategist at Forex.Com in New York told Reuters. "As confidence increases, that could be a good thing for personal consumption and spending moving forward, which also helps the economy because consumption makes a large portion of GDP."
In the stock market today here's one winner that's continuing a six-month hot streak, and one loser that could be on the verge of a rocky year.
- Carnival Corp. (NYSE: CCL) reports strong earnings– Cruise line operator Carnival beat earnings with net income of $1.3 billion, or $1.71 per share. Excluding one-time gains, adjusted profits were $1.53 per share. Analysts on average had expected adjusted EPS of $1.45. Revenue decreased 7.4% to $4.7 billion but was just ahead of forecasts. For fiscal 2012, Carnival now expects non-GAAP diluted earnings per share between $1.83 and $1.87 which is higher than The Street's consensus of $1.82. The company has rebounded from the disaster in January when its Costa Concordia liner hit a reef and partially sank off the coast of Italy. "These results demonstrate that the cruise industry has proven more resilient than investors had expected following the accident and is likely recovering at a faster pace than expected," ITG Senior Leisure Analyst Matthew Jacob told Reuters. CCL stock rose almost 3% by noon.
- Paychex Inc. (Nasdaq: PAYX) disappoints investors– Paychex reported fiscal first-quarter earnings that slightly beat estimates but the payroll processing company missed on revenue. The Rochester, NY-based company reported fiscal first-quarter revenue rose 3% to $578.2 million. Analysts had projected revenue of $584.3 million. Net income increased to $153.1 million, or 42 cents per share, compared with $148.9 million, or 41 cents per share, in the year-ago period. Analysts had expected EPS of 41 cents. Paychex stock has done well over the past year, rising 28%, but is down today following several downgrades. Citigroup Inc. (NYSE: C) analyst Ashwin Shirvaikar downgraded his rating on Paychex stock to "Sell" from "Neutral." He said it appears that Paychex is on track to post another year of lackluster growth that can't justify its current share price. UBS lowered its rating to neutral, citing "cautious overall commentary and general top-line lightness." PAYX stock is down almost 3% as of noon.
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Home prices, consumer confidence gain