Investors Watch for More Signs of Housing Turnaround

Home price data will get more attention than usual Tuesday, as traders watch to see if the glimmer of improvement in housing continues.

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S&P/Case Shiller home price data is reported at 9 a.m., and while prices may still be in decline, traders have been quick to jump on any improvement lately as housing seems to be turning a corner. November’s prices fell a disappointing 0.7 percent, when reported last month.

But home builder stocks, like Toll Brothers , Lennar and Hovnanian , were all higher Monday, after pending sales for January came in better than expected and neared a two-year high.

New home sales for January exceeded expectations last week, and sales of existing homes in January were also better, rising 4.3 percent, an 18-month high to an annual rate of 4.57 million.

Durable goods are also reported Tuesday, at 8:30 a.m. EST, and consumer confidence is reported at 10 a.m.

Stocks Monday hit two big numbers, but failed to hold gains and finished nearly flat. The S&P crossed 1,370.58, its 2011 high, to set a new bull market high of 1,371.94. The S&P Friday closed above its 2011 closing high of 1,363 for the first time. It finished at 1,367 Monday, up just 1 point.

The Dow, meanwhile, continued its flirtation with the big round 13,000 level. It crossed the number once more Monday, after first breaching the level last week, but it closed down 1 point at 12,981.

Peter Boockvar, market strategist at Miller Tabak, said markets are anticipating the European Central Bank auction for its emergency lending program (LTRO). The results will be announced Wednesday.

“Once the LTRO is done, we have a lot of the QE catalyst out of the background and the market to me will have a more difficult time. It’s really going to need improved economic data to sustain it. I don’t think the economy is as robust as people think it is. I can’t ignore the 1.90 yield on the 10-year,” said Boockvar.

The LTRO, launched in December, is credited by some analysts with sparking the latest leg of the current rally. QE, or quantitative easing , is also on the minds of investors, as they await Fed Chairman Ben Bernanke’s testimony before a Congressional committee Wednesday. They are watching to see if he will make any more definitive statements about whether the Fed will conduct another easing program.

Oil prices backed off Monday ,as investors took profits after seven session run. West Texas Intermediate fell 1.1 percent to $108.56 per barrel, and Brent fell 1 percent to $124.17 per barrel.

What Else to Watch

Companies reporting earnings before the bell Tuesday morning include AutoZone, HollyFrontier, FirstEnergy, El Paso, Western Refining, Rowan Companies, Bank of Montreal, Cablevision, Fortress Investment, Office Depot, and Tenet Healthcare. DreamworksAnimation reports after the closing bell. J.P. Morgan holds its investor day Tuesday.


GOP voters take to the polls in Michigan, home state to former Mass. Gov. Mitt Romney, and Arizona Tuesday. President Obama speaks to the United Auto Workers conference in Washington.

Follow Patti Domm on Twitter: @pattidomm

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