Stocks rally on housing data

Pending home sales rise. D.R. Horton posts its 1st profit in nearly 3 years. UPS sees shipments picking up in 2010.
by Elizabeth Strott on Tuesday, February 2, 2010

A better-than-expected report on pending home sales and strong results from homebuilder D.R. Horton (DHI) helped ease concerns about the housing market and lift stocks today.

The National Association of Realtors' index of pending home sales rose 1% in December after tumbling 16.4% in November. Pending sales reflect deals that have been signed but not completed. Sales were up 10.9% from the same month a year ago. The index has risen for nine out of the past 10 months as buyers work to take advantage of homebuyer tax credits extended by the government to prop up the market.

At the close, the Dow Jones Industrial Average ($INDU) was up 111 points to 10,20297. The Nasdaq Composite Index ($COMPX) had gained 19 points to 2,190, and the Standard & Poor's 500 Index ($INX) had added 14 points to 1,103.

Crude oil soared today on an improving economic outlook, rising $2.76 a barrel, or 3.7%, to $77.19. Gold continued its ascent, rising $10.50 to $1,115 an ounce. The yield on the benchmark 10-year Treasury ticked down 2 basis points to 3.63%.

D.R. Horton swings to profit

D.R. Horton's shares were up $1.27, or 10.7%, to $13.18 after the the nation's second-biggest homebuildler posted its first quarterly profit in nearly three years.

The Fort Worth, Texas, company said it swung to a profit of $192 million, a huge improvement from the net loss of $62.6 million it posted in the same quarter a year ago.

The stock was up $1.38, or 11.6%, to $13.29.

UPS sales slip, but Dow's revenue rises

Shares of United Parcel Service (UPS), the world's biggest package-delivery company, rose on an optimistic forecast for this year. The Atlanta company, a bellwether of consumer spending and business activity, forecast gains in package volume, pricing and profit for 2010.

"The numbers for Q4 were a little bit better than what they had previously guided, but the guidance for 2010 looks really good," Arthur Hatfield, a transportation analyst at investment bank Morgan Keegan, said in an interview on CNBC. "Overall, it looks like things are going to get a little better throughout 2010."

Dow Chemical (DOW) earned $87 million, or 8 cents per share, in the fourth quarter, a turnaround from a loss of $1.55 billion, or $1.68 per share, in the same period of 2008. Excluding special items, earnings were 18 cents a share, beating the Street by 7 cents.

Sales at Dow Chemical rose 15% to $12.5 billion, thanks in part to sustained growth in emerging regions. The company cautioned that growth in the United States and Europe will continue to lag amid high unemployment. Dow shares were off 76 cents, or 2.7 3%, to $27.87.