Following some mixed earnings releases and a not-so-useful economic report, the Dow Jones Industrial Average (DJINDICES: ^DJI ) is up 41 points, or 0.26%, to 15,586 as of 1:20 p.m. EDT, while the S&P 500 (SNPINDEX: ^GSPC ) is within a point of breakeven.
There was only one U.S. economic release today.
| FHFA House Price Index | May | 0.7% | 0.5% |
The Federal Housing Finance Agency reported that its home price index rose a seasonally adjusted 0.7% in May compared with April's downwardly revised 0.5% growth. Year over year, the home price index is up 7.3%. The FHFA's House Price Index only includes mortgages that are backed by Freddie Mac and Fannie Mae, so the index can be seen as an approximation of middle-class home prices. That said, the index isn't that helpful, as the information is two months old. Since then, mortgage rates have jumped a full percentage point as the Fed has hinted that it might begin tapering its long-term asset purchases as soon as the end of this year.
US 30 Year Mortgage Rate data by YCharts.
Yesterday the National Association of Realtors said existing-home sales dropped in June to a seasonally adjusted annualized 5.08 million, down from May's 5.18 million. It remains to be seen whether home prices will stay higher with the increased mortgage rates now affecting buyers.
Today's Dow leader is United Technologies (NYSE: UTX ) , up 2.8% thanks to the resurgence of commercial-airline orders and commercial air travel in general. The company reported earnings per share of $1.70, up 5% from the prior-year quarter and better than analyst expectations of $1.57 per share. Revenue of $16 billion fell short of analyst expectations of $16.3 billion. The big reason the stock is up today is that the company raised its earnings guidance for the year to between $6.00 and $6.15 per share, up from the previous guidance of $5.85 to $6.15 per share.
On the other side of earnings, Travelers (NYSE: TRV ) is today's worst Dow stock, down 3.4% after reporting better-than-expected earnings but disappointing future pricing guidance. The company reported EPS of $2.41, far better than analyst expectations of $1.64 per share, while revenue of $6.39 billion was well ahead of analysts' expectations of $6 billion. Despite all the good news, in the conference call the company indicated that its increased prices, while contributing to the great results, were leading to a drop in volume. This suggests that Travelers' recent outperformance is unsustainable and the company will have to lower its prices to remain competitive.
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