Monday, May 21, 2018

Economic signals mixed as home builder confidence rises, Dell struggles

Amid Thursday's sharp stock market declines, the broader economy continued to send mixed signals. It included upbeat news for the housing industry, a slowing growth forecast by an upscale department store and just plain bad news for a major maker of laptops as consumers accelerate their shift to other electronic devices. Here's a roundup:

• Confidence high: Among U.S. home builders, confidence is at its highest level in nearly eight years, fueled by optimism that demand for new homes will drive sales growth into next year. The brighter sales outlook is the latest sign pointing to a sustained pickup in construction in coming months and comes as applications for permits to build single-family houses are at a five-year high. The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday jumped to 59 this month from 56 in July. It was the fourth consecutive monthly gain. A reading above 50 indicates more builders view sales conditions as good, rather than poor.

The last time the reading was above 59 was in November 2005, when it was 61. U.S. sales of new homes peaked in July 2005.

• High, low for Nordstrom: The retailer says its second-quarter profit rose, but the department store operator cut its forecast for the year, citing softer-than-expected sales trends. Its stock fell 3.3 percent to $57.40 in after-hours trading Thursday. The Seattle-based company is considered a barometer of luxury spending, and growth in the sector is seen as a good sign for the economic recovery. For the quarter through Aug. 3, the company says it earned $184 million, or 93 cents per share, topping the 88 cents per share analysts expected. In the same period a year ago, Nordstrom earned $156 million, or 75 cents per share.

• Dell's struggles: The computer company's earnings plunged 72 percent during its fiscal second quarter as it struggled to cope with technological upheaval and shareholder unrest. The disheartening results announced Thursday could help Dell Inc.'s board convince more of the company's stockholders that they're better off accepting a buyout offer from a group led by CEO Michael Dell rather than risk further financial deterioration in the months ahead. Shareholders are scheduled to vote on Michael Dell's $24.8 billion bid Sept. 12.

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