Stocks traded in mixed fashion before finishing with a mild rally on light volume. There are many traders who feel the current rally is “technical” in nature instead of “fundamental” The difference is that technical means a lot of short covering is going on. The gurus are thinking that longer term investors are not active because they do not see much of a boom in either earnings or the economy. At the close the Dow gained 21 points to 17,623.
The National Association of Realtors reported that existing home sales fell 7.1% in February reflecting a much worse drop than the 2.8% decline which housing experts had forecast. The reading was the lowest since November of last year and reflects a tight supply and rising prices more than anything else. Prices were up 4.4% over the past year and the current inventory stands at about 4.4 months. Housing gurus consider a 6 month inventory to be the sweet spot. During the 2008 housing crisis the inventory level crested 12 months for an extended time. A strong labor market was expected to boost housing but it looks like the lack of inventory is starting to throw cold water on an otherwise solid part of the US economy.
Oil continues to creep higher in price. WTI crude rose 1.2% $39.91 a barrel. Oil price gains were muted thanks to concerns that rising prices will allow US producers to ramp up production fairly easily.
The price of gold slipped a bit after last week’s Fed induced rally. Gold closed down $10 at $1,244 an ounce.