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Today's warning comes from Lennar. The company has become the 5th major US homebuilder in a little more than a month to slash its outlook. It says the nation's real estate market is quote "continuing to deteriorate. " The problems, Lennar says it looks like new home orders slipped around 5% while at the same time, the company has been forced to boost sales incentives and that’s eating away at its bottom line. Virginia?
Well, Jen, Lennar just one piece of the puzzle, of course as we know, the signs of a housing slowdown have been coming for a while though, right?
Yeah, that is for sure, anywhere you look at Z&Z these days, and if you put all of those pieces together, it is definitely not a pretty picture.
Earlier in the week, homebuilders Hovnanian and KB Home cut their guidance as well, citing cancelled orders and generally unfavorable conditions in the housing market, and you know what, it's not just sales of new homes that are suffering now. Yesterday, an industry group slashed its forecast for existing home sales for this year. The main reason? Buyers are staying on the sidelines, hoping better deals will come along and they are just afraid to jump into a declining market at this point. And by the way, shares of the major homebuiler, builders had a volatile week, and today, finished mostly lower.
Mm, but for the overall market, a different story, right?
Yeah, it was a little bit of a different story, you know, stocks put in a pretty strong performance on this Friday, although the major averages are still below where they started this holiday-shortened week. There was some reassuring comments on inflation from a Federal Reserve official and that helped lift investors' spirits. Also oil prices dropped yet again, finishing the week more than 4% lower at $66. 25 a barrel. Just take a look at those final numbers right now, the Dow Industrials rose nearly 61 points to 11,392. And the NASDAQ added half a percent, so not too shabby, at least a little bit of green here on the Street today.
Not bad, not bad at all, we like to see, you know, a little improvement. Now, there has been buzz on Wall Street on this for months, Amazon. com getting into the online TV and movie biz, can you talk about that?
Yes, buzz no longer. This is a new service that allows users to download TV shows and full-length movies onto their PCs. The service is dubbed AmazonUnbox that features movies from most of the biggest Hollywood studios as well as TV shows from dozens of TV networks both broadcast and cable. TV shows will cost just under $2 and movies will range from about $8 to $15. They can also be rented for 3.99. Interestingly, Walt Disney Pictures is not participating in this new deal. Coincidence? Probably not. Apple CEO Steve Jobs is Disney's biggest shareholder and sits on the board, and there is a great deal of speculation that Apple will launch its own movie download service next week, partnering with who else? Disney. Apple has announced a major press event for next Tuesday. They don't like to give a lot of information ahead of those, but that's a speculation anyway. Amazon shares, by the way today, added 2.5%. That is latest from New York.
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