Tuesday, May 24, 2011

U.S. Home Sales Rise 7.3% In April, But Number Of Problem Banks Grow

For the second month in a row, after a steep drop in February, new-home sales rose. The annualized rate for April was 323,000 seasonally adjusted, for a 7.3% increase over March's.
The increase surprised economists, who had forecast a slight decline to 295,000, according to a MarketWatch survey....

Those gains followed February’s steep drop to a 278,000-unit pace. Analysts had attributed that weakness in part to winter storms that depressed figures in the East and the Midwest as well as a California tax credit that has expired

Increases in the past two months have come as the new-home market is near the bottom. Compared with April 2010, last month’s sales were down 23.1%.
Inventories of new homes also shrunk to about 6.5 months' worth, for the best showing since April of last year. However, the government warned that the underlying survey data isn't that accurate and is subject to large revisions.

Less sunnily, the FDIC reported that the number of problem banks increased slightly during the first quarter of this year. Although bank profits as a whole are healthy, the number of problem banks increased to 888 from 4Q '10's 884.

Gold rose solidly before these items were released, to $1,528, as the greenback resumed a slight decline. When the reports were released, the metal's advance halted and it got stuck around $1,527-8. It skidded a half an hour later, and then settled in around $1,525. The U.S. Dollar Index got a bit of a boost from the news, but it only lasted several minutes.

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