Homebuilding stocks continue to rebound from 52-week lows carved out last week while tech investors were encouraged by a number of favorable earnings reports and brightening sentiment.
There’s no place for bullishness until this mortgage/private-equity mess gets stabilized. But when will investors know that happened? Investing can be confusing. Luckily, Cramer has mapped out some road rules for all you Home Gamers trying to navigate the jungle that is Wall Street. Think of it as "Mad Money 101" –- some fundamental advice to keep in mind as you play the market. Whether you're a first time investor or a seasoned financier, it's always good to remember the basics.
Stocks ended a volatile week with a late selloff, erasing any hope for a quick recovery from last week's trouncing.
There was little cheer about for the real estate and housing industries this week, but the news flow was not nearly as unrelentingly negative -- some would say depressing -- as the previous two weeks.
Stocks rose sharply in the final minutes of trading, with the Dow posting a triple-digit gain, as bargain hunters snapped up beaten down shares after credit jitters weighed on the markets all session. "At some point we have to look at the recent downturn as being slightly overdone," Arthur Hogan, managing director at Jefferies, told CNBC.com.
Another day of big volume and big volatility. Why the late-day turnaround? With volatility like this, it's no wonder traders are lost and confused; the momentum guys are not sure if they should be buying or selling.
One rumor on the floor that Beazer might be in trouble and -- boom -- the whole sector drops like a brick. I run around calling all the analysts I know, and one by one they say it's all unfounded -- yeah, Beazer has some issues with litigation and its lending practices, and there's that SEC investigation that was announced as "formal" last week, but overall they're in no worse position than any of the other beleaguered home builders. Their stock may be, but the company isn't.
Speculators in homebuilder stock options had a volatile day as they chased rumors that Beazer Homes was about to file for bankruptcy, only to hear the company deny the rumors.As one trader said: "It's a chiropractors' market as we whip up and down".
Earnings news and analyst revisions were some of the catalysts behind the most actively traded stocks on Wednesday.
Beazer Homes USA said Wednesday that rumors that sent down its stock down nearly 40% are "unfounded."
MasterCard posted results that beat analyst expectations by a much narrower margin than in the past, sending its shares down as much as 12.5 percent in a skittish market Wednesday.
Stocks suffer their worst weekly declines in more than four years as worries about credit and lending undermine investor confidence.
Bad news in the housing market this week was enough to rock the stock market right off its foundations. Existing home sales, new home sales, homebuilder earnings reports, no one expected them to be bright, but the numbers cast a heavy shadow on any optimism for a quick recovery in housing.
Stocks closed sharply lower and the Dow saw its biggest decline since the market meltdown in late February as disappointing news from the housing industry renewed concerns about credit markets and the U.S. economy. "This is just one more of the period panics that we've had in the last six months," said Barton Biggs, managing partner at Traxis Partners. "The puncture of the debt bubble is a positive development and restores some kind of sanity to the debt market."
The slaughterhouse that has been the U.S. housing market for the past few months got bloodier on Thursday as several industry leaders reported worse results, July home sales fell more than expected and stocks throughout the sector hit multiyear lows.
How are some home builder CEOs reacting to the current housing market? Donald R. Horton, CEO D.R. Horton: “Market conditions in the homebuilding industry continue to be challenging as inventory levels of both new and existing homes remain at historically high levels. Increased use of sales incentives continues to put pressure on profit margins. In addition, home price appreciation over the past few years, higher interest rates and tightened credit standards in the mortgage industry are all negatively impacting affordability.”
Credit worries and bad news from home builders trumped any positives from the stream of earnings being reported this morning. Wall Street is set up for a steep drop on the opening and the talk in the market focuses on whether the takeover boom is ending.
Beazer Homes USA, facing a deteriorating U.S. housing market and federal investigations into lending practices, posted a quarterly loss on Thursday as the builder took charges for inventory and goodwill impairments and abandonment of land option contracts.
Next week, no fewer than six major public home builders will report their quarterly earnings, all right around the same day that the U.S. Dept. of Commerce reports its New Home Sales data for the month of June. I doubt either will be very heartening for investors.
Speculation that Warren Buffett could buy a stake in Hovnanian sent the homebuilders up. But on "Street Signs" today Cramer explained why there's a more likely target. Investing can be confusing. Luckily, Cramer has mapped out some road rules for all you Home Gamers trying to navigate the jungle that is Wall Street. Think of it as "Mad Money 101" –- some fundamental advice to keep in mind as you play the market. Whether you're a first time investor or a seasoned financier, it's always good to remember the basics.