INSTANT VIEW: Home sales rise 6 percent in October

NEW YORK (Reuters) - Sales of newly built U.S. single-family homes in October rose more than expected to their highest level in a year, data showed on Wednesday, pointing to a stabilizing housing market after a three-year slump.

KEY POINTS: * The Commerce Department said sales jumped 6.2 percent to a 430,000 annual pace, the highest since September last year, from an upwardly revised 405,000 in September. * Analysts polled by Reuters had expected new home sales to climb to a 410,000 annual pace from September's previously reported 402,000. The rise in sales pushed the supply of new homes on the market last month down to 239,000 units, the lowest since May 1971.

CONSUMER SENTIMENT: U.S. consumer sentiment improved slightly in late November from earlier this month, but it was weaker than October on deep anxiety over personal finances, a survey showed on Wednesday.

KEY POINTS: * The Reuters/University of Michigan Surveys of Consumers said the final figure for its index of consumer sentiment in November stepped up to 67.4 from 66.0 in the first half of the month. * Analysts had expected a final November figure of 67.0, compared with a final October reading of 70.6.

COMMENTS:

ALAN LANCZ, PRESIDENT, ALAN B. LANCZ & ASSOCIATES INC., TOLEDO, OHIO:

"The data looks like it's pretty in line to slightly above expectations. That's enough fuel for the markets usually and the day before and the day after Thanksgiving usually have a positive bias anyway.

"Unless it was something drastic one way or the other, there isn't enough people to react."

JOHN J. CANALLY JR., CFA, INVESTMENT STRATEGIST, LPL FINANCIAL, BOSTON, MASSACHUSETTS:

"Housing was a drag on GDP growth for 14 consecutive quarters from early 2006 through second quarter 2009 but added to GDP growth in the third quarter 2009, a quarter earlier than we had previously thought. We think housing, that is sales of new and existing homes, housing prices and housing starts, has now finally entered a bottoming process due in large part to the 80 percent drop in housing starts over the past three years. The inventory of unsold new homes, at 239,000, is well below its long term average and at a 38 year low. As is the case with existing home sales, a potential threat to October's tally of new home sales was the looming expiration of the $8,000 first time home buyer tax credit in November. It seems however that the potential end of the credit may have pushed people into the market who were on the sidelines."

TODD LEONE, HEAD OF LISTED TRADING, COWEN & CO., NEW YORK:

"Looks pretty good. Looks decent, nothing that the Fed is going to look at and change their mind about anything. But for the most part it looked like it was OK. Looks like people are spending again a little bit more, which is bad for the savings rate but good for the retailers and good for the economy. Everything else was OK and no great shakes either way. Market is taking it fairly well. Yesterday was an incredibly quiet day. I wouldn't be surprised if we see that light volume today. There are a lot of people that are out. I wouldn't be surprised if the data is muted today because of that."

CAMERON FINDLAY, CHIEF ECONOMIST, LENDINGTREE.COM, CHARLOTTE, NORTH CAROLINA:

"The important element to new home sales as opposed to existing is that it is a precursor to support for labor, materials and construction industries as well, therefore contributing toward improvements in GDP. With GDP released yesterday and actual results in line with expectations it will be a positive boost to the economy to see a much stronger new home sales number. This suggests also we may have hit a barrier with mainstream supply in new homes which may lend itself to pricing support in this sector."

THOMAS NYHEIM, VICE PRESIDENT AND PORTFOLIO MANAGER, CHRISTIANA BANK & TRUST CO., GREENVILLE, DELAWARE:

"The home sales data was above consensus and a surprise, the thing that is playing into that is the $8000 tax credit that keeps pushing the numbers up. That is a positive but it's only going to be out for the next six to seven months even thought they extended it, so it's a temporary relief."

RYAN WANG, U.S. ECONOMIST, HSBC SECURITIES, NEW YORK

"I thought maybe there was going to be a drop-off. Some of the other data has started to decline.

"I think activity has recovered-it appears to be in the process of recovering-and the key question is what happens with the labor market. We're clearly not out of the woods yet, but we could see payrolls turn positive early next year.

"I think the jobless claims number is the most surprising. I think it's the one that catches my attention the most today. The four-week average has fallen for 12 weeks in row now."

MARKET REACTION: STOCKS: U.S. stock indexes were slightly stronger. BONDS: U.S. Treasury debt prices added to losses. DOLLAR: U.S. dollar rose against the euro.