U.S. stocks ended mixed Wednesday after a late-session profit taking almost wiped off a 156-point rally in the Dow average that was fueled by the Fed’s encouraging assessment of the economy and its decision to keep interest rates low for an extended period.  The optimism was short-lived as investors appeared jittery ahead of the October jobs report on Friday. Fresh concerns over bank earnings resurfaced after the House of Representatives passed a bill curbing credit card rate increases.

After the house vote, financials slumped 1.5% and led the decliners among the S&P 500 industry groups.  Analyst Meredith Whitney noted the biggest U.S. banks may face declining values on home-loan bonds with government backing as the Fed moves towards ending its $1.25 trillion purchase program.  Whitney said bank earnings are far from approaching "normalcy," and will reflect regulatory changes for an extended period.  JPMorgan (NYSE:JPM) fell 1.2% to $42.21 and

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For Immediate Release

Chicago, IL – October 29, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Beazer (BZH), Lennar (LEN), Fannie Mae (FNM), Freddie Mac (FRE) and WellPoint, Inc. (WLP).

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Here are highlights from Wednesday’s AnalystBlog:

New Home Sales Sink, Credit Rising

For the month, median prices rose 2.45%, although they are still down 9.1% from a year ago. Average prices posted an even stronger rise, up 10.1% on the month and down just 1.6% from a year ago. That probably is mostly a reflection of the regional

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US stocks ended Monday with losses on fresh concerns that the current market levels are overblown.  A rebound in dollar against key foreign currencies sent commodities lower and financials fell as reports emerged the federal government may require Bank of America to raise more capital.  The group took another beating as influential analyst Richard Bove trimmed his ratings on a number of regional banks.  Homebuilders also led the market lower on reports the first time homebuilders' tax credit is unlikely to be extended.

The Dow Jones industrial average oscillated within a 200-point range and briefly touched the 10,000 mark, before some profit taking saw the index squandering the earlier advance and ending the day 104-points lower.  Technology shares, only sector to have recorded gains last week, fell out of favor and slid along with the broader market.  The technology-laden Nasdaq retreated 12.62 points, or 0.6%, to 2,141.63.  The CBOE

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The Dow Jones industrial average rose 61 points on Thursday as traders reacted to news that retailers last month had their first sales gain in more than a year.  A closely watched gauge of sales at major retailers rose 0.1% in September. Still, most stores posted sales declines -- though smaller than in recent months -- even as their figures are compared with last September when business plummeted as the financial meltdown ballooned.  While still tepid, it was the first monthly rise in the International Council of Shopping Centers-Goldman Sachs tally since July 2008. 

On Thursday, the European Central Bank and Bank of England left interest rates unchanged.  Sentiment also received a boost from domestic corporate borrowing, which rose for the eight straight week. 

The growing optimism surrounding consumer spending, which is crucial for an economic recovery, followed late Wednesday's good results from Alcoa.  The company surprised investors with

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Fears about the pace of the recovery have caused stocks to tumble. Technology stocks are being particularly hit hard with NVIDIA (NVDA) and Micron Technology (MU) down by more than 5% on the day. Financials and homebuilders are also faring poorly. Both Zions Bancorp (ZION) and Lennar (LEN) have large intraday losses. At the heart of the problem is the labor situation. The employment component in the ISM Survey worsened slightly to 46.2. (Readings over 50 signal expansion, or in this case, hiring.) Initial jobless claims also rose, reversing a previously weekly improvement. Dirk van Dijk pointed out on our Analyst Blog, "In recent weeks progress on claims has stalled out and become erratic." Compounding matters is the Monster Employment Index, which also worsened. The index declined to 119 last month from 121 in August. Monster Worldwide Vice President Jesse Harriott observed, "U.S. ...

In August, total spending on construction rose to a seasonally adjusted annual rate of $941.9 billion, a 0.8% increase from the July rate of 934.6 billion. Through the first eight months of the year, construction spending has totaled $629.5 billion, down 11.9% from the $714.3 billion spent in the first eight months of 2008. Construction spending is a major component of investment in the GDP accounts, both in terms of residential investment and in non-residential fixed investment in structures. Residential and non-residential construction spending are now headed in opposite directions. Residential construction rose by 4.7% in August to an annualized rate of $249.5 billion, while non-residential construction dropped a slight 0.1% to an annual rate of $372.6 billion. As the chart below (from http://www.calculatedriskblog.com/) shows, it is unusual to see non-residential spending exceed residential construction. That said, residential spending got way out of hand ...

New home sales in August rose a less-than-expected 0.7% to a seasonally adjusted annual rate (SAAR) of 429,000. Sales had been expected to come in at 440,000. Sales were also 3.4% below the year-ago level of 444,000. The result was especially disappointing since this was probably the last month that one could buy a new home and still close on it in time to get the first-time homebuyer tax credit. Still, there was some good news in the report. Inventories fell 3.7% to 261,000 and are down 36.5% from a year ago. On a months-of-supply basis, that gets us back down to 7.3 months, from 7.6 months in July and 11.1 months a year ago. The months-supply metric peaked out in January at 12.4 months. Over the long haul, six months is about normal, although during the housing bubble we were frequently below four months. Thus relative to sales, ...

KB Homes, Inc. (KBH), the fifth largest U.S. homebuilder, continues to be cautious about the housing market even as net orders improved and its cancellation rate dropped compared to a year ago.

The company reported third quarter results that missed on the Zacks Consensus Estimate by 29.85%. Earnings per share was a loss of 87 cents, well under the Zacks Consensus Estimate of a loss of 67 cents.

Revenues fell 33% to $458.5 million from $681.6 million in the year ago quarter. The majority of the decrease was due to lower housing revenues which was the result of a 20% decline in homes delivered to 2,240 and a decline of 15% in the average selling price over the third quarter of 2008 to $202,800.

The backlog also fell to 3,722 homes as of Aug 31 from 4,774 homes a year ago.

In some positive news, net orders rose 62%

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In August, the seasonally adjusted annual rate (SAAR) of existing home sales was 5.10 million, a decline of 2.7% from the 5.24 million pace in July, and well below the 5.35 million pace expected by the consensus of economists. However, it was a 3.4% improvement from the 4.93 million pace of a year ago. The month-over-month decline came despite mortgage rates being slightly lower in August (5.19%) than in July (5.22%). Rates are well below the 6.48% of a year ago. The median price, which is not the best measure of home prices since it can be affected by mix shifts, fell 12.5% from a year ago to $177,700. Existing home sales do follow a distinct seasonal pattern (as can be seen in the graph from http://www.calculatedriskblog.com/ below), so seasonal adjustment is needed. Traditionally, August is one of the most important months of the year for ...

Today's Fed decision was no surprise, but questions abound about the timing of Bernanke's next move. The Federal Open Market Committee (FOMC) voted unanimously to keep the fed funds target rate between 0% and 1/4%. The wording of the statement reflected a slightly more upbeat assessment of the economy, with the observation that "economic activity has picked up." In August, the Fed opined that "economic activity is leveling out." Expectations for long-term inflation were described as "stable," which is new language and something I don't necessarily agree with. A change to the planned purchase of agency mortgage-backed securities was also made, with the program now scheduled to end in the first quarter, instead of next month. Today's meeting was a no-brainer for Bernanke. All he had to do was say the economy is getting better and he wasn't tightening policy. Give the Fed chairman credit for ...