Stocks Crawl to End First Quarter

Wall Street ended a sluggish quarter on March 31, 2005, the close of our trading session, sagging on stellar oil prices. Investment firm Goldman Sachs predicted a sharp jump in energy prices, and that negative outlook weighed against higher United States incomes and strong consumer spending. However, the price of crude, ending the quarter at $55.

June 01, 2005

Wall Street ended a sluggish quarter on March 31, 2005, the close of our trading session, sagging on stellar oil prices. Investment firm Goldman Sachs predicted a sharp jump in energy prices, and that negative outlook weighed against higher United States incomes and strong consumer spending.

However, the price of crude, ending the quarter at $55.30 per barrel, was the major negative pressure. "The important thing today, the only thing of significance, is the oil figure," said Tracy Herrick, chief economist for the Private Bank of the Peninsula, Palo Alto, Calif.

"That is the most troubling thing for the market because it has a long-term negative effect on the economy and could act as a drag on profits. Everything else indicates the economy is in glide path for continued strength. The increases in interest rates so far have had no impact on the economy, so that's not an issue. Oil is the issue."

The maiden voyage of the Giants/HousingZone.com Builders' and Building Product Manufacturers' indices ended mixed, with the Builders' Index following the national markets south, and the Product Manufacturers' Index edging into the black. The Builders' Index shed 72.18 points, or 5.82 percent, to close at 1168.08. Of the 36 stocks tracked in the Builders' Index, declining issues handily outpaced advancing issues by a 30-to-6 count. The Product Manufacturers' Index added 7.76 points, or 0.77 percent, to end at 1014.07. Despite the increase, declining issues still outmaneuvered advancing issues by a 9-to-5 count.

In the Builders' sector, Weyerhaeuser increased 1.57 points, or 2.35 percent after the company said it wouldn't take a charge against earnings to pay for a damage award from a patent dispute with now-bankrupt Paragon Trade Brands. The dispute arose over a private label diaper division Weyerhaeuser sold to Paragon. Weyerhaeuser said it would appeal the decision "because it believes the bankruptcy decision will be ultimately reversed." In a note to clients, Smith Barney analyst Chip Dillon said, "Practically speaking, we expect the case to get bottled up for years in federal court, making this issue, we believe, largely irrelevant for investors at this time." Weyerhaeuser closed at 68.50.

Despite reporting record results for the year and the quarter ended December 31, 2004, shares of Comstock Homebuilding Companies slid 8.41 points, or 28.32 percent to end at 21.29. The company, which debuted publicly at an initial public offering on December 14, 2004, said the IPO generated net proceeds of $67.8 million. Comstock was our top percentage loser this month.

Walter Industries went on a tear this month after the company upped its full-year estimates for 2005. Walter said it expects to earn between $2.50 and $3.10 per share, and cited better-than-anticipated pricing on its metallurgical coal contracts. The increase was $0.30 ahead of its previous forecast. Walter Industries added 4.18 points, or 10.89 percent, and was the top dollar and percentage gainer in the Builders' Index this session.

Domestic manufacturers, including Maytag and Whirlpool, told the U.S. International Trade Commission that trade tariffs initiated in 1999 to stem a tide of low-priced steel from Japan, Brazil and Russia were creating higher steel prices and pressuring their businesses. In opposition, more than a dozen lawmakers in steel producing states testified in favor of keeping the tariffs. The Commerce Department has found that suspending the tariffs would result in more steel imports from those countries. Maytag lost 1.27 points, or 8.33 percent and closed at 13.97. Whirlpool added 3.98 points, or 6.24 percent, and ended at 67.73. Whirlpool was the top dollar and percentage gainer in the Product Manufacturers' Index this session.

For the complete list of the Builders' and Building Product Manufacturers' indices, visit http://www.housingzone.com/economics.

Price 3/31/2005 Price 2/28/2005 Net Change Percent Change
Product Manufacturers' Index 1014.07 1006.31 7.76 0.77%
Dow Jones Industrial Average 10503.76 10766.23 -262.47 -2.44%
S&P 500 Index 1180.59 1203.60 -23.01 -1.91%
NASDAQ Composite 1999.23 2051.72 -52.49 -2.56%


Gainers/Losers
$ Gainer Whirlpool Corp. 3.98
$ Loser Mohawk Industries, Inc. -5.44
% Gainer Whirlpool Corp. 6.24%
% Loser Dow Chemical Corp. -9.61%
Advancers 5
Decliners 9
Source: Trade Trends, Inc. (509) 327-1279


Price 3/31/2005 Price 2/28/2005 Net Change Percent Change
Builders' Index 1168.08 1240.26 -72.18 -5.82%
Dow Jones Industrial Average 10503.76 10766.23 -262.47 -2.44%
S&P 500 Index 1180.59 1203.60 -23.01 -1.91%
NASDAQ Composite 1999.23 2051.72 -52.49 -2.56%


Gainers/Losers
$ Gainer Walter Industries (Jim Walter Homes, Inc.) 4.18
$ Loser Meritage Homes Corp. -14.31
% Gainer Walter Industries (Jim Walter Homes, Inc.) 10.89%
% Loser Comstock Homebuilding Companies, Inc. -28.32%
Advancers 6
Decliners 30
Source: Trade Trends


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