Why Did Home Sales Drop?

News that fewer than expected previously occupied homes were bought last month prompted stocks to dip early Wednesday.

The Dow Jones Industrial Average fell 0.1 percent to 13,551.31 and S&P 500 index lost 0.8 percent or 1.11 points to be at 1,404.50 at 10:28 EDT. The Nasdaq composite was up 0.1 percent.

Energy stocks and basic materials were hit. Exxon Mobil (NYSE:XOM) shares dropped 0.4 percent to $86.22, Chevron (NYSE:CVX) fell 1 percent to $107.97, and Schlumberger (NYSE:SLB) fell 2.4 percent to $73.91. United States Steel (NYSE:X) dropped 1.4 percent to $30.92 early on Wednesday.

Existing-home sales fell 0.9 percent in February to a 4.59 million annual rate from a revised 4.63 million pace in January, the National Association of Realtors reported. Home sales dropped in two out of four regions. Sales in the Northeast were down 3.3 percent and fell 3.2 percent in the West. Sales in the Midwest were up 1 percent. Sales in the South were up, too, by 0.6 percent.

However, last month’s sales were 8.8 percent above the same month a year earlier, and it was the strongest February in five years. “The market is trending up unevenly,” Lawrence Yun, the chief economist for the Realtors group, told Forbes.

Building permits rose by 5.1 percent, showing potential for future growth.

To contact the reporter on this story: Aabha Rathee at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com