Homebuilders up following Fed's interest rate cut

LOS ANGELES - Shares of large U.S. homebuilders were trading higher Wednesday as the Federal Reserve cut the fed funds rate by a half point — a move that could make it cheaper to obtain some home loans.

The prime rate banks set on consumer loans for everything from auto loans to home equity loans usually moves in lockstep with the fed funds rate, which now stands at 1 percent.

Homebuilder shares in general rose steadily through the day before the Fed's afternoon announcement.

Dallas-based Centex Corp. and Fort Worth, Texas-based D.R. Horton Inc. led the sector, with shares climbing 22 percent and 21 percent, respectively, during afternoon trading.

Centex shares rose $2.00 to $11.26, while D.R. Horton's shares rose $1.07 to $6.23.

Shares of Los Angeles-based KB Home rose $2.00, or 15 percent, to $15.28, while Miami-based Lennar Corp.'s shares rose 79 cents, or 12 percent, to $7.14.

Bloomfield Hills, Mich.-based Pulte Homes Inc.'s shares rose 78 cents, or 8.4 percent, to $10.02.

Shares of Horsham, Pa.-based luxury builder Toll Brothers Inc. rose $1.56, or 8.3 percent, to $20.48, while Red Bank, N.J.-based Hovnanian Enterprises Inc.'s shares added 6 cents to $3.67.

Shares of Atlanta-based Beazer Homes USA Inc. rose a penny to $2.34.

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