Stocks fell after some bad housing market news.
First, the scoreboard:
- Dow: 16,040.5 (-89.8, -0.5%)
- S&P 500: 1,828.7 (-12.0, -0.6%)
- Nasdaq: 4,237.9 (-34.8, -0.8%)
And now the top stories:
- Housing starts plunged 16% month-over-month in January to an annualized pace of 880,000. Building permits fell 5.4% to 937,000. Both numbers missed expectations by a wide margin. "The sharp fall in housing starts in January looks like further payback following November’s surge, combined with weather-related disruption," said Capital Economics' Paul Diggle. "So while 2014 has got off to an unpromising beginning, we think that this year will be a strong one for housing starts."
- For those blaming all bad news these days on harsh winter weather, there was one odd detail in the housing starts report. "The Northeast saw housing starts surge 61.9% to an annualized pace of 136,000 units," observed BI's Mamta Badkar. "On the year it was up 56.3%."
- "There are other more serious constraints on the homebuilding recovery – the cost and availability of labour and lots, and the fact that mortgage applications are at rock- bottom levels foremost among them," added Diggle. Indeed, earlier today, we learned that mortgage applications fell another 4.1% during the week ending Feb. 14.
- All of the disappointing economic data in recent weeks have caused Citi's Economic Surprise Index — a measure that tracks actual economic data relative to economists' estimates — to fall to zero today. The last time this index was at this level was in October.
- The Federal Reserve published the minutes of its January Federal Open Market Committee meeting today. The release revealed some interesting commentary on forward guidance (the Fed has previously said it would use an unemployment rate threshold of 6.5% and an inflation rate threshold of 2.5% to guide monetary policy). From the minutes: "Participants agreed that, with the unemployment rate approaching 6-1/2 percent, it would soon be appropriate for the Committee to change its forward guidance in order to provide information about its decisions regarding the federal funds rate after that threshold was crossed. A range of views was expressed about the form that such forward guidance might take."
- Electric car maker Tesla announces quarterly earnings after the closing bell today. Follow the release live at BusinessInsider.com.
- Don't Miss: The 14 US Housing Markets With The Worst Foreclosure Rates »
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