A report sparks worries that housing and the economy might be worse than expectedStocks dropped Monday morning after a report showed a fall in new home sales to a 7-year low, which suggests the economy and housing situation are worse than expected, says S&P.
The Dow Jones industrial average fell 96.29 points, or 0.77%, to 12,384.72. The broader Standard & Poor's 500 index was down 11.12 points, or 0.77%, to 1,424.99. The tech-heavy Nasdaq composite declined 16.68 points, or 0.68%, to 2,432.25.
In economic news, February new home sales, which was expected to rise to 1.0 million, fell another 3.9% to a 848,000 pace in February, after tumbling 15.8% to a revised 882,000 million rate in January (937,000 initially). That contradicts expectations for a rebound, but this could be another weather story given the poor conditions in much of the U.S. last month, says Action Econmomics. The median price rose to $250,000, vs. $243,200 in January, but is down 0.3% year-over-year. "This may feed back into worries that the subprime market is sparking tighter credit conditions and slower lending and new housing demand, though the weather may be to blame," says Action Economics.
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