Live Markets: Housing, building materials stocks brought down by earnings

Carlisle Companies

22/10/2024 18:05

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    HOUSING, BUILDING MATERIALS STOCKS BROUGHT DOWN BY EARNINGS
    Shares of housing and building materials companies are lower
on Tuesday after investors were disappointed by quarterly
updates from handful of housing-related companies.
    On the homebuilder side, NVR Inc  NVR.N  shares are down
about 3% after it missed Wall Street estimates for third-quarter
earnings per share as higher lot costs and closing cost
assistance weighed on profit margins.
     Also, U.S. homebuilder PulteGroup  PHM.N  is seeing its
shares fall about 6% after it reported home sale gross margins
below year-ago levels even as it beat Wall Street estimates for
third-quarter earnings. 
    On the materials side, shares of paint company
Sherwin-Williams  SHW.N  are down >4% after it missed
third-quarter profit estimates due to lower sales in segments
catering to housing, as well as automotive and aerospace.
    While they did not report earnings themselves, the reports
appear to be pressuring related companies such as Builders
FirstSource  BLDR.N , which is off >2%, Martin Marietta  MLM.N ,
down 1.7% 2% and Vulcan Materials  VMC.N , down about 2%. Masco
Corp  MAS.N  is down >2%, while Carlisle  CSL.N  is down 1.6%. 
    Peter Tuz, president of Chase Investment Counsel in
Charlottesville, Virginia, pointed to the weaker than expected
earnings reports for the declines as well as concerns that
interest rates could impact demand.  
    "There's news from companies in the sector that is a little
weaker than expected. That plus the backup in interest rates is
making other companies in the sector weaker than the market
today," he said. 
    While the broader S&P 500 index  .SPX  is off just 0.2% on
Tuesday, the S&P 500 building products index  .SPLRCBULD  is
down 1.4%. The building products index had gained sharply in
September, but started to lose steam around mid October. 
    "As mortgage rates were coming down there was optimism more
homebuilding would occur. When rates turn around there's a
likelihood home sales and home building will fall off subsequent
to that," said Tuz.
    
    (Sinéad Carew)
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