To: ~digs who wrote (1386 ) 8/23/2005 4:28:20 PM From: ~digs Respond to Disappointing figures on US home sales helped take the wind out of Wall Street's sales on Tuesday despite a pair of meteoric rises in the pharmaceutical sector.All three main indices turned red soon after the National Association of Realtors confirmed that while the housing sector continued to boom - the reported rate of sales of previously owned homes was the third highest level ever - the figures were nonetheless below expectations.House builders tumbled on the news with KBH Homes taking the biggest hit, sliding 2.8 per cent to $70.21. Pulte Homes (NYSE:PHM) was down 1.8 per cent at $82.61 and Lennar fell 2.3 per cent to $58.35.All of which added to the woes of the Dow Jones Industrial Average. By mid-afternoon, the indicator was 0.4 per cent down at 10,523.8. The S&P 500 was also off 0.4 at 1,217.23. The Nasdaq Composite fell 0.2 to 2,136.57.George F. Foley, portfolio manager at Glenmede, said low trading volumes had helped to exaggerate the significance of the housing numbers. "In August when you get a bit of negative news about a sector that has been propped up on stilts then people run for the door - there are just no buyers out there at the moment."Among the day's other fallers was Dow component Citigroup (NYSE:C), which dropped 1.7 per cent to $43.46, after news broke that Marjorie Magner, head of consumer banking, Citigroup's most profitable unit, will step down at the end of September.La-Z-Boy was the latest company to blame its flagging performance on high oil prices, which are thought to erode consumer spending power. Shares in the company famous for its reclining chairs fell 6.7 per cent to $13.06 after it said it expected second quarter sales to decrease and forecast earnings below analyst's expectations.Other home furnishers also slipped with Ethan Allen Interiors down 1.6 per cent to $31.82 and Furniture Brands International fell 1.3 per cent to $19.25. Telecoms equipment maker Lucent fared better, with its stock up 4.2 per cent to $2.99 after Prudential Equity Group upgraded the company, suggesting improved sales of wireless-networking equipment and further job reductions could lift profits over the next few quarters.Other gainers included a spectacular rise of 26 per cent to $27.63 for Amylin Pharmaceuticals after the drugmaker announced positive test results for a new once-weekly injection treatment for sufferers of type 2 diabetes.Eli Lilly, which also had a hand in developing the new Byetta drug, gained 1.4 per cent to $53.45. Alkermes (NASDAQ:ALKS), the developer of the Medisorb injectable drug system that will be used in conjunction with the drug, gained 8.6 per cent to $17.19.No such luck for Merck, the drug company still reeling from its order by a Texas jury to compensate the widow of man who died after taking the painkiller Vioxx for eight months. The stock fell a further 1.1 per cent to $27.58. biz.yahoo.com
