Homebuilders fall to 10-month low on sales data, earnings miss
Homebuilders are sinking today. Blame that on disappointing economic data and earnings reports that trailed estimates.
The S&P Homebuilding Select Industry Index fell 2.8% as of 11:07 a.m. in New York, poised for its biggest drop since early April and its lowest closing level since September. The S&P Supercomposite Homebuilding Index retreated 3.3%, its fourth straight day of losses, with all 15 members in the red. Owens Corning plunged as much as 14 percent after its second-quarter results missed estimates.
Builders and related companies — like home-appliance makers — were punished Wednesday after data showed purchases of new homes fell to the slowest pace in eight months in June, and the median selling price declined to the lowest in more than a year. That added to pessimism that appeared Tuesday when data showed existing-home sales dropped for the third month in a row in June.
Owens Corning wasn't the only industry bellwethers that has posted worse-than-forecast earnings. The maker of home appliances Whirlpool Corp. plunged 15% on Tuesday after reporting disappointing second-quarter results and annual guidance. The stock was down as much as 4.7% on Wednesday, widening its plunge since mid-July to 21%.
Beacon Roofing Supply Inc. fell 4.6%, while the Russell 2000 Building Materials Index is down 2.5% in the fourth day of losses.
The industry could get a reprieve in coming days if companies post earnings above estimates. Meritage Homes Corp. reports earnings after the bell on Wednesday, while PulteGroup Inc. and D.R. Horton Inc. are scheduled to report earnings on Thursday.