Dow Retreats From 60+ On Housing News To End Down 100 Points On Massive Spain Austerity Protests:
Housing news didn’t encourage investors today as the Dow switched direction in midday trading. The S&P Case/Shilling report today showed housing prices in July increased in 10 of the nation’s largest metropolitan areas by 1.5%. Housing prices increased nationally by approximately 1.6% when an additional 10 areas reported by the monthly data are included. July 2012 was the third consecutive month that prices for homes nationally increased in all 20 cities monitored by the Case/Shiller Index and the data conflicts with Gary Shilling’s prediction recently that housing prices would drop another 20 percent. The housing market may not have bottomed but it is showing some resilience with data last week showing August existing home sales hit a new high not seen since May 2010.
Spain Austerity Protest Images Rattle Markets
The positive housing news today didn’t impress investors as the market ended the day with the Dow down 101 points to 13,457 as pictures from Spain’s austerity protests hit the wires. Police in Madrid fired rubber bullets into crowds and fought off protestors with batons according to reports from the region. Protestors attempted to tear down barriers blocking access to parliament in Madrid and stocks slide heavily on fears the protests could continue across Europe.
The inside outside trading today makes us cautious about the short term but we are still relatively bullish longer term. Continued political economy issues at home and abroad would change our outlook significantly from early this week. Shares of small cap stocks were near support levels and Apple hasn’t re-rallied. We are looking at this as a buying opportunity for those money managers trying to play catch up and may add to positions before week’s end if the market moves rangebound or off recent lows.