Pending Home Sales, Factory Orders Dip

It isn’t clear that the days of yo-yoing equity markets have gone away–just wait until the next international shock or surprise bankruptcy–but for the moment the Dow Jones index seems to have mellowed out. It fluctuated above its starting point yesterday and ended up gaining a modest 62.21 points, or 0.69 percent. The S&P 500 gained 0.78 percent and the Nasdaq gained 1.5 percent. Tech investors apparently aren’t all that worried about the state of Steve Jobs’ health (Apple was down slightly yesterday, but has gained 6.6 percent since New Year’s Eve). Recall that only a couple months ago, a spurious Internet rumor that Jobs had a heart attack caused Apple stock to have its own heart attack, at least for a short while. Still, Tuesday gave the markets various kinds of somber news to digest. The National Association of Realtors’s Pending Home Sales Index skidded to a record of low of 82.3 in November, but then again the index has only been around since 2001, so comparisons with the last serious recessions in the 1970s, ’80s, and ’90s aren’t possible. Still, NAR chief economist Lawrence Yun pretty much confirmed the obvious in a statement: “Mounting job losses and very weak consumer confidence deterred homebuyers from signing contracts in November.” Factory orders also plunged in November, some 4.6 percent, according to the U.S. Department of Commerce. That points to a serious industrial contraction, but perhaps not as serious as the headlines say. Strip out orders at petroleum refineries, which fell 22 percent during the month, and the factory-order decline in November was only about half as bad as the 4.6 percent average suggests. The 111th Congress formally came into being yesterday (except for a couple of missing Senators) and Barack Obama will be sworn in as 44th President of the United States in less than two weeks. Plans for a stimulus, vague before the holidays, are bound to come into sharper focus before long. Will commercial real estate see any relief? Maybe not directly, though industry groups are lobbying for a share of TARP, with an uncertain outcome. Commercial real estate may have to wait for more indirect relief via the stimulus, and as a lagging industry, that might take some time. “The stimulus package should help commercial real estate by jump-starting the demand for rental space,” Peter Morici, professor at the Robert H. Smith School of Business of the University of Maryland, told CPN.