Last updated: November 8, 2013 11:03 pm

US housebuilders fall on strong jobs data

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DR Horton, PulteGroup and other large US housebuilders fell on Friday after US job growth unexpectedly accelerated in October, raising expectations that the Federal Reserve will reduce its bond-buying programme, lifting mortgage rates and possibly hurting demand for new homes, reports Reuters.

DR Horton slipped 2.3 per cent to $18.13, PulteGroup was down 3.8 per cent to $16.84 and Lennar fell 4.2 per cent to $32.79. Toll Brothers , the luxury housebuilder, dropped 2.3 per cent to $31.94.

But financial stocks led gains on the S&P 500 with a 2.3 per cent advance, following a more than 1 per cent drop in the sector on Thursday, on the expectation that higher interest rates will translate into stronger earnings.

JPMorgan Chase added 4.5 per cent to $53.96 while Wells Fargo , Bank of America and Citigroup were up more than 2 per cent.

Clothing retailer Gap ’s shares led percentage gains on the S&P 500 with a 9.8 per cent advance to $41.43, a day after it said October same-store sales rose 4 per cent, well ahead of the analysts’ average estimate of 0.1 per cent.

Disney shares rose 2.1 per cent to $68.58 after its profit jumped to beat Wall Street expectations, lifted by higher visitor spending at US theme parks, increased consumer product sales and its summer animated film hit, Monsters University.

Santarus surged 37.6 per cent to $31.95 after Salix Pharmaceuticals agreed to buy the drugmaker for about $2.6bn. Salix shares jumped 17.8 per cent to $84.00.

Twitter fell 7.2 per cent to $41.65 on its second day of trading. The microblogging site’s shares jumped 73 per cent in a frenzied trading debut on Thursday that drove the seven-year-old company’s market value to around $25bn and evoked the heady days of the dotcom bubble.

Overall, US stocks jumped on Friday, bouncing back from a sell-off in the previous session after an unexpectedly strong payrolls report lent weight to views that the world’s largest economy is stronger than previously thought.

The Dow Jones Industrial Average rose 1.1 per cent to 15,761.78, the S&P 500 gained 1.3 per cent to 1,770.60 and the Nasdaq Composite added 1.6 per cent to 3,919.23.

Futures had fallen immediately after data showed 204,000 jobs were created last month, much more than the expected 125,000, as it increased chances the Fed could scale back its stimulus before the end of the year.

Some market participants are, however, looking past the Fed taper and focusing on what the prospect of a better economy will mean for equities. , the online travel agency known for its name-your-own price auction, rose 4.9 per cent to $1,073.20 after it posted a higher-than-expected quarterly profit on Thursday as bookings increased.

Tesla ’s shares continued their fall since Thursday when the company reported the third fire in its Model S luxury electric car in six weeks, this time after a road accident in Tennessee. The stock was down 1.3 per cent to $137.95.

Monster Beverage fell 3.4 per cent to $55.16. The energy drinks maker reported a third-quarter profit that missed analysts’ estimates, hurt by legal costs related to its Monster Energy drinks.

Groupon gained 6.4 per cent to $10.11 after the daily coupon website reported a third-quarter profit that beat analysts’ estimates as strong growth in North America helped offset a decline in international revenue.

Nvidia , the graphics chipmaker, added 7 per cent to $15.56 even as it gave a revenue forecast for the current quarter that was shy of Wall Street’s expectations as the company faces tough competition in tablets and a slow personal computer market.

Riverbed Technology jumped 16.1 per cent to $17.54 after affiliates of Elliott Management, the activist hedge fund, disclosed a stake of about 9 per cent in the network equipment maker, which it said was “significantly undervalued”.

Horizon Pharma surged 30 per cent to $4.86 as the speciality pharmaceutical company reported a narrower than expected quarterly loss on strong sales of its arthritis treatment Duexis.

Other economic data showed consumer spending rose 0.2 per cent after advancing 0.3 per cent in August, in line with expectations.

The Thomson Reuters/University of Michigan’s preliminary reading on consumer sentiment fell to 72.0 in November, its lowest since December 2011 and below both October’s final reading of 73.2 and the 74.5 forecast.

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