Home Sales, Construction and Estee Lauder Get Their Financial Houses in Order
by Anne Szustek
The number of existing home sales went up in March, construction spending is improving and Estee Lauder’s recent quarterly report shows hope for luxury beauty products.
The Financial Times reported that according to the National Association of Realtors Pending Home Sales Index, “the number of people signing contracts to buy existing homes rose 3.2 per cent” in March from February. The measure of sales of already built housing inventory hit an all-time low in January and has since been rebounding. “Things certainly look a bit less bad than in the dark days at the turn of the year,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, was quoted as saying by the FT. The National Association of Realtors Index is considered a key indicator of housing sector trends because home buyers ink contracts months before home sales are completed.
Also on the property front: Commerce Department figures show spending on construction went up 0.3 percent in March, marking the first monthly increase in six months. “The U.S. stock market rallied” on the news, writes Reuters, “with the Dow Jones U.S. home construction index .DJUSHB, jumping nearly 9 percent.” Meanwhile, some economists see hope for building new homes. Nigel Gault, the chief U.S. economist at IHS Global Insight in Lexington, Mass., told Reuters, “I think in coming months we will start to see the residential side flattening out … We are still holding for fourth-quarter recovery (in the economy), (but) it's possible it could come sooner.”
Estee Lauder is making a six-month comeback, posting profits of $0.16 per share (besides 2 cents incurred by restructuring) during the first three months of 2009, more than triple the $0.05 average estimate given by analysts polled by Bloomberg. The cosmetics company, which besides its namesake brand also produces Clinique and Bobbi Brown, is concentrating on keeping the company’s expenses in check and offering products across a variety of price points to retain a customer base that may be potentially wary of shelling out for department store cosmetics during a recession. As of Monday at 3:21 pm EDT, Estee Lauder stock was trading in the $36 range, the highest it’s been since October.