US Market+Sector News

Stocks Notably Lower As New Home Sales Figures Sink Sentiment Stocks are posting notable losses in mid-morning trading on Wednesday, as the markets are reacting to far worse than expected May new home sales numbers. The major averages are all in negative territory, slipping further away from Friday's one-month closing highs. Equities turned firmly lower after a slow start as the Commerce Department reported a much steeper than expected decline in new home sales in the month of May, with the expiration of the homebuyer tax credit resulting in reduced demand. New home sales plunged by 32.7 percent to an annual rate of 300,000 in May from the downwardly revised April rate of 446,000. Economists had expected sales to fall to a rate of 430,000 from the 504,000 originally reported for the previous month. With the monthly decrease, new home sales in May were down 18.3 percent compared to the same month a year ago, falling to their lowest annual rate since the government began tracking the data in 1963. At 2:15 p.m.ET, the Federal Reserve, at the conclusion of the 2-day Federal Open Market Committee meeting, will release its much awaited policy statement. Economists are likely to focus on the Fed's economic commentary more so than its interest rate decision, as interest rates are almost universally forecast to remain unchanged. In its commentary, the Fed is expected to acknowledge a slight cool off in the pace of the economic recovery. On the corporate front, BP plc (BP) is officially following through in changing leadership of its Gulf of Mexico operations in connection with the oil spill. Chief Executive Tony Hayward is handing over control of the oil spill cleanup to another BP executive, Robert Dudley, who will now be the president of the firm's Gulf Coast Restoration Organization. The major averages have moved well off their worst levels of the day in recent trading, although they remain stuck in the red. The Dow is down 36.42 points or 0.4 percent at 10,257.10, the Nasdaq is down 16.71 points or 0.7 percent at 2,245.09 and the S&P 500 is down 7.01 points or 0.6 percent at 1,088.30. Sector News Housing stocks are among the morning's worst performers, dragging the Philadelphia Housing Sector Index down by 1 percent. Earlier, the index slumped to its worst intraday level in over seven months after the day's disheartening new home sales data. Oil service stocks are also under pressure, resulting in a 1.1 percent decline by the Philadelphia Oil Service Sector Index. Despite the drop, the index remains rangebound. Weakness is also visible among airline, software, commercial real estate and gold stocks, further indicating the day's broad-based selling pressure. Meanwhile, some strength among tobacco and wireless stocks is limiting the drop by the broader markets. Where's the Dow Headed? You've seen the free charts. Now get the charts you haven't seen... Best Free Stock Charts The prettiest, fastest, web-based stock charts period. View them now. American Penny Stocks Can You Trade American Stocks? If So Possibly Never Lose Again