• Dell (NASDAQ:DELL) revealed plans to acquire Perot Systems (NYSE:PER) –founded my former U.S. Presidential candidate, Henry Ross Perot- for about $3.9 billion, or $30 per share in efforts to expand beyond its core computer business to include computer-services consulting. • Wynn Resorts (NASDAQ:WYNN) has responded to positive reactions to its plans for an initial public offering in Hong Kong of its Macau casino operations, increasing the size of proceeds to about $1.6 billion from $1 billion of a few weeks earlier. • Credit Suisse (NYSE:CS) lifted its rating on Novellus Systems (NASDAQ:NVLS) to "outperform" from "neutral" with a price target of $29, up from $23. • Lennar Corp (NYSE:LEN) reported a 3rd quarter loss of 97 cents, including 76 cents in charges, versus estimates of a $0.48 cent loss, compared with a 56 cent loss last year. • Synnex Corp (NYSE:SNX) is scheduled to report earnings today, with an ...

Why Did These Companies Cream the S&P 500?

Is the U.S. housing market truly at a turning point, as investors seem to increasingly believe? Or is this actually a false dawn, meaning that there are problems and pain ahead for those who turned bullish too soon?

New home sales jumped almost 10% in July, while the Case-Shiller home price index rose for the second successive month. Yet luxury homebuilder Toll Brothers lost $493 million in the quarter ending July 31, considerably worse than analysts had expected.

Housing stocks are certainly acting as if a recovery must be on the way. Pulte Homes Inc. (NYSE: PHM) has more than doubled from its low. Toll Brothers Inc. (NYSE: TOL) is up around 70% from its bottom. D.R. Horton Enterprises (NYSE: DHI) is up almost four times from its bottom. Lennar Corp. (NYSE: …

General Motors Corp. (NYSE: GM) is closing in quickly on its June 1 deadline to finish overhauling its operations, or opt for Chapter 11 bankruptcy. Because that deadline is actually one week from yesterday (Monday), analysts and investors will be watching GM closely this week.

No matter which path GM chooses – conventional restructuring or bankruptcy – the U.S. Big Three of GM, Ford Motor Co. (NYSE: F) and Chrysler LLC will have to adjust to the U.S. auto market’s post-financial-crisis “new reality.” Automakers will sell only 10 million cars and trucks in the U.S. market this year, the worst in at least 30 decades – and roughly 38% less than the 16 million vehicles that were sold in the United States annually in recent years before the financial collapse caused an accompanying collapse in auto sales.

Part of the reason for the

...

Highlights include Lennar Corp. (LEN), D.R. Horton, Inc. (DHI), Weyerhaeuser Co. (WY), Masco Corp. (MAS) and Fortune Brands, Inc. (FO). New home sales fell just 0.6% in March from an upwardly revised February sales pace. However, at a seasonally adjusted annual rate of just 356,000, it was still the worst March since records of new home sales started in 1962. Nationwide, on a year-over-year basis, new home sales are down 30.6% -- and remember the slide in new home sales did not start a year ago. From the peak in mid-2005, new home sales are down almost 75% (see graph below; larger version available at: http://www.calculatedriskblog.com/). Regionally the results were very mixed (the regional numbers have extremely large standard errors, so take all of them with a grain of salt). In the Northeast, sales plunged 32.1% for the month, and were

...

Lennar Corp. (LEN) has slipped more than 11% today, accompanied by higher-than-average volumes.

The homebuilding major reported a first-quarter loss of 98 cents per share, amid a worsening slump in the housing market. Analysts were expecting a loss of 71 cents per share.

The Miami-based company recorded 45% year-on-year decline in revenues to $593.1 million. LEN also said that it wrote down $10.2 million for 1,100 sites where it has discontinued construction.

"Despite historically low interest rates and some indicators pointing toward market stabilization, low consumer confidence, increased unemployment and growing foreclosure rates negatively impacted new home sales in most of our markets," chief executive Stuart Miller said.

Analysts have reduced earnings estimates for fiscal 2009 by 6 cents over the past month. The negative surprise is could cause further downward revision in estimates over the next several quarters.

LEN is a Zacks #3 Rank ("Hold") stock.

...

Highlights include D.R. Horton, Inc. (DHI) and Lennar Corp. (LEN).OK, one month does not make a trend, and we have lots and lots of ground to make up.  But combine the news on New Home Sales (NHS) with the report earlier this week on existing home sales and today's durable goods report, and we just might have some good news for the economy.Remember the mantra -- at this point, more new housing starts bad, more new home sales good.Well, in February, NHS were up 4.7% to a seasonally adjusted annual rate of 337,000 from January's rate of 322,000. The January number was revised up a significant 4.2% from the initial read of 309,000.Still, nationwide, NHS are down 41.1% from a year ago, and just a tiny fraction of the 1.4 million annual rate at the peak of the insanity ...

As Housing Starts Fall… Lenders Putting “Final Screws” Into Homebuilders

by Don Miller, Contributing Writer, Money Morning

Editor’s Note: We’ve been talking a lot about real estate in Investment U recently, specifically how it relates to Real Estate Investment Trusts (REITs). One of the other aspects of REITs that’s making them look more attractive is the housing market for new construction. As it declines and the financing dries up for builders, old construction will start increasing in value. That bodes well for REITs. Our colleagues over at Money Morning have taken a look at some of the issues facing builders that we feel are extremely relevant to the real estate market right now.

New Housing Starts Hit 50 Year Lows

New housing starts fell in December to the lowest levels since the government started compiling statistics in 1959, as surging unemployment continued to rock the real estate market. The numbers offer more evidence

…

What’s Keeping Obama up at Night?

by Don Miller Contributing Writer, Money Morning

Editors Note: Inevitably the fanfare and excitement about our new administration will die down, and they will have to get down to work. President-elect Obama may have a laundry list of urgent jobs, but fixing the economy is priority one. The market’s problems are about to become his problems. Money Morning gives us a taste of the economic data that’s been keeping the president-elect and Wall Street up at night – and what we should be paying attention to as well.

Stock Market Gyrates as Reports Show Economy Deep in Recession

The stock market struggled to recover from a tumultuous 2008 yesterday (Tuesday) while digesting a trio of downbeat economic reports from the manufacturing, housing and service sectors.

The reports included separate data on factory orders and pending home sales for November, as well as the Institute of

...

The stock market struggled to recover from a tumultuous 2008 yesterday (Tuesday) while digesting a trio of downbeat economic reports from the manufacturing, housing and service sectors.

The reports included separate data on factory orders and pending home sales for November, as well as the Institute of Supply Management report on the non-manufacturing index for December - giving investors fresh insight into the depth of the current recession.

Despite the overall negative tone of the reports, some analysts maintain the worst may be over.

“While the economic headlines remain grim, stocks are holding higher in quiet trading because a lot of the bad news was already discounted when the stock market crashed in 2008,” Frederic Ruffy, options strategist, at WhatsTrading.com told MarketWatch.

Factory Orders Fall Biggest Since 1992

Data from the manufacturing sector confirmed that the recession accelerated in November. Orders placed

...

The big bailout will be a key focus of the markets.

Congress is expected to meet over the weekend to discuss legislation proposed by Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson. The details of the proposal, and any additional measures designed to help homeowners struggling with mortgage payments, could impact market direction.

The temporary ban on short selling could also affect trading early in the week. Part of Friday's rally was the result of quadruple witching. Traders are being forced to close short positions rather than roll them over into new contracts.

On the earnings front, we have confirmed reports from 33 companies. Included in this group are S&P 500 members Autozone (AZO), Bed Bath & Beyond (BBBY), Discover Financial (DFS), Jabil Circuit (JBL), KB Home (KBH), Lennar (LEN), McCormick (MKC), Nike (NKE) and Paychex (PAYX). I expect

...