Housing angst and Fed on stocks' agenda
NEW YORK (Reuters) - The anxiety level on Wall Street may escalate this week with housing sector indicators due and a Federal Reserve meeting that most agree will end with no change in short-term interest rates.
The week begins with nationwide demonstrations by war protesters marking the fourth anniversary of the Iraq war. One of those protests is planned for outside the New York Stock Exchange before the opening bell.
A key piece of data will be February housing starts, which will be released on Tuesday morning one hour before the start of regular trading.
In January, the Commerce Department said that housing starts fell 14.3 percent to an annual rate of 1.408 million units.
In a Reuters poll of economists, the consensus is that the February number will rebound a bit to 1.450 million units.
The data includes building permits, which are expected to fall to an annual rate of 1.550 million units from January's pace of about 1.57 million units.
Money manager Sean Clark, who considers the housing slump to be a "major risk for the economy," pointed out that the expected increase in housing starts represents a small bounce from a weak January number.
Clark, chief investment officer of Clark Capital Management Group in Philadelphia, said a concern is that the housing slowdown will have a greater impact on the general economy than people were expecting at the beginning of the year.
Any bad news about the housing sector has the potential to roil the stock market some more after last week's steady drumbeat of headlines about problems in the subprime mortgage market, which caters to borrowers with weak credit.
For the past week, stocks fell. The blue-chip Dow Jones industrial average .DJI lost 1.4 percent for the week, while the S&P 500 .SPX fell 1.1 percent and the Nasdaq Composite Index .IXIC slipped 0.6 percent.
EXISTING HOME SALES SEEN LOWER
On Friday, the National Association of Realtors reports on sales of existing homes. The median forecast in the Reuters poll is a drop to an annual rate of 6.31 million units in February from 6.46 million in January.
On Monday, the National Association of Home Builders is scheduled to report its latest survey of market conditions.
The NAHB/Wells Fargo Housing Market Index is expected to fall to 38 in March from 40 in February. The index has climbed back from a 15-year low of 30 in September 2006.
A big change in the housing picture has been the deterioration in subprime mortgages, which are loans to borrowers with shaky credit. Continued...
