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Mid-Day Market Recap: Stocks in the Red Despite Housing Data
Markets are in the red on Friday as investors snatch profits after four days of rapid gains. Earnings reports from Citigroup and Bank of America were better than expected, but the former was boosted by its sale of Smith Barney, and the latter was lifted from selling its large stake in a Chinese bank ― one-time gains that don’t provide optimism looking ahead. Earnings from General Electric were better than expected, but markets put more emphasis on its revenue, which dropped 17% in Q2.
Housing Starts Beat Forecasts, Rise on all Fronts
A housing construction report indicated higher levels of activity than the range of forecasts, but that had more to do with revisions to the previous month than a rebound in activity. The actual monthly gain was modest.rnrnHousing starts ― new construction of private homes ― gained a 3.6% in June, sending the annual rate of construction to 582,000. The median forecast was just 530,000, but data for May was revised up by 30k.
Markets to Be Choppy Ahead of Options Expiration
Four days of gains have brought the S&P 500 up 6.59% this week to price levels that are testing 2009 highs. Stocks may look to continue this trend after better than expected earnings releases this morning. Following positive reports earlier in the week from Goldman Sachs and JP Morgan, Bank of America announced that they profited $3.4 billion, or 72 cents a share, in Q2, against expectations that it would gain just 28 cents per share.
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