What the F___ LONDON (MarketWatch) -- J.P. Morgan said it was taking a more positive stance on homebuilders, upgrading D.R. Horton Inc. (DHI : D.R. Horton, Inc. & TOL28.81, +0.55, +1.9% ) to neutral from underweight. "We believe key leading fundamentals are either beginning to stabilize or are on the cusp of recovering over the next few quarters, and historical performance trends point to a longer-term positive move," the broker said. In particular, J.P. Morgan said inventories -- which it believes were the leading driver of the market's recent downturn -- are beginning to stabilize and should drive a market recovery. End of Story
Then this comes out at 8:38am BOSTON (MarketWatch) -- D.R. Horton Inc. said Tuesday fourth-quarter net sales orders for new homes dropped 25% from a year earlier on sluggish demand for housing. "The current selling conditions in the home-building industry continue to be challenging, with higher-than-normal cancellation rates and increased use of sales incentives in many of our markets," said Chairman Donald Horton in a statement. The nation's largest home builder, Ft. Worth, Tex.-based D.R. Horton (DHI : D.R. Horton, Inc. News , chart, profile, more Last: 23.84+0.25+1.06% 8:01am 10/10/2006 DHI23.84, +0.25, +1.1% ) said orders for the three months ended Sept. 30 fell to 10,430 homes valued at $2.5 billion, down from 13,950 and $3.8 billion in the year-ago quarter. Its cancellation rate for the latest quarter rose to 40%, up from 29% the prior year. D.R. Horton shares are down 32% so far in 2006. "As fundamentals continue to deteriorate and buyer sentiment sours further, we think Horton and other builders will continue to have a primary focus on working through inventory by reducing prices and increasing incentives," wrote Banc of America Securities analyst Daniel Oppenheim in a recent research note. Chart of DHI While discounts may help stabilize orders for new homes, the trade-off is that earnings may decline sharply in 2007, the analyst said. "We think the stocks may initially react positively to what is viewed as stabilization in order trends but should move lower when the reality of the margin declines sinks in as builders report earnings," Oppenheim said. Home-builder stocks could see heavy trading Wednesday, the date that minutes of the Sept. 20 meeting of the Federal Open Market Committee, the Federal Reserve panel that charts the course of U.S. interest rates, are scheduled to be released. "We expect high volatility ... as they have moved an average of 2% over the past year on days the Fed released its minutes," Oppenheim observed. Also Tuesday, KB Home (KBH : kb home com News , chart, profile, more Last: 44.79+1.20+2.75% 8:01am 10/10/2006 KBH44.79, +1.20, +2.8% ) said quarterly orders fell 43% from a year earlier as the company delayed filing full financial results for the third quarter to complete an internal review of stock-option grants. See related story. End of Story
8:55am BOSTON, Oct 10 (Reuters) - Citing a "challenging" U.S. housing market, top U.S. home builder D.R. Horton Inc. (DHI.N: Quote, Profile, Research) on Tuesday said orders for its just-ended fourth quarter dropped as its cancellation rate rose. The Fort Worth, Texas-based company said fourth-quarter net sales orders came to 10,430 homes, worth $2.5 billion, down from 13,950 homes, worth $3.8 billion a year earlier. Its cancellation rate rose to 40 percent in the quarter, up from 29 percent in the third quarter. "The current selling conditions in the home building industry continue to be challenging, with higher than normal cancellation rates and increased use of sales incentives in many of our markets," said chairman Donald Horton, in a statement. After several years of growth, the U.S. housing market has started to slow over the past year, prompting major home builders to pursue divergent strategies to maintain their sales. Companies like Horton are opting to cut sales prices to drive volume, while rivals including Toll Brothers Inc. (TOL.N: Quote, Profile, Research) have preferred to hold prices steady to protect profit margins. (Additional reporting by Aditya Phatak in Bangalore) © Reuters 2006. All Rights Reserved.
Some investment banks want to unload their homebuilder stocks near the top so they upgrade to get the prices back up. Would not be surprised if they dump the stocks by the end of the year....
Doesnt anyone comprehend that the homebuilders are not done feeling the slowdown in the housing sector. A Market recovery already???? I dont think so. The numbers im seeing from most homebuilders show there is more problems ahead. I see at least another 25% drop in the hombuilders.
What a crock of shit. Seriously. I can't call this manipulation, although it really is. I mean, if it's not manipulation, what is it?
âAlthough the impact of alternative mortgage products and adjustable-rate mortgage resets have yet to be felt, Fitch views the recent repurchase uptick as a rational self-correcting mechanism.â thats all i wanted to hear..... $500 billion worth of ARMS to reset by the end of 2006 and another $1-2 TRILLION worth in 2007. Could this be great for the slowing economy. Hmmm... They have yet to be felt means its only going to get worse. 40% of the jobs created in the last 5 years came from construction, real estate agents, mortgage lending etc etc etc...With this sector slowing its going to have a deep impact on this economy.