Last updated: November 26, 2013 9:14 pm

US homebuilders boosted by housing data

A sharp increase in earnings from Tiffany cheered investors on Tuesday, as shares in homebuilders stood out on a day of mixed trading amid positive US housing data.

The jewellery retailer reported earnings per share that easily beat analyst expectations and raised its full-year guidance. Tiffany has been recently boosted by growth from China, as well as improving margins.

As a result, the company known for its little blue boxes gained 8.7 per cent to $88.05 on Tuesday, putting shares 53.5 per cent higher in 2013.

Tiffany’s gains also helped boost other jewellery retailers such as Zale, which gained 3.9 per cent to $14.83.

Tiffany helped keep the S&P 500 in positive territory, with the index up fractionally to 1,802.83.

US homebuilders were among the strongest areas on news that a rise in US house prices beat expectations and residential construction was at its highest level since 2008. That sent investors broadly to buy US housing stocks that have endured a difficult 2013 due to doubts that the real estate recovery was sustainable.

PulteGroup gained 4.4 per cent to $18.95, DR Horton rose 4.6 per cent to $19.93, Lennar added 5.1 per cent to $36.07, and Taylor Morrison moved 6.6 per cent higher to $21.86.

The Dow Jones Industrial Average also inched barely higher to 16,072.80, and the Nasdaq Composite Index gained 0.6 per cent to 4,017.75.

The Nasdaq closed above the 4,000 level for the first time in 13 years. The tech index was boosted by some of its most heavily weighted stocks. Apple was up 1.8 per cent to $533.40, Google rose 1.2 per cent to $1,058.41, and Facebook ticked up 2.4 per cent to $45.90.

Deal news drove shares in Men’s Wearhouse 7.4 per cent higher to $50.57 after the clothing retailer made a bid to buy competitor Jos A Bank. The offer would pay $55 a share for Jos A Bank, which previously launched its own takeover attempt for Men’s Wearhouse.

Jos A Bank shares traded 11.3 per cent higher to $56.30.

However, it was not all good news for retailers. Shoe retailer DSW fell sharply after the company issued earnings per share and revenue guidance that disappointed investors.

DSW dropped 4.8 per cent to $44.97, but remains up 32 per cent in the past 12 months.

The books business did not look much better than the shoe business. Barnes & Noble reported that the company swung to an unexpected profit in the second quarter. But shares in the book retailer fell 6 per cent to $15.45 after revenue fell below estimates.

Human resources software provider Workday was among the strongest stocks on the day, up 12.8 per cent to $82.59 after reporting earnings that beat expectations.

Packaged food producer Hormel also beat earnings estimates, leading to a 5.9 per cent rise to $44.95.

Shares in internet media company Mediabistro nearly doubled on news that the company had invested in a 3D printing media company. Mediabistro was up 87.2 per cent to $4.10.

While the S&P and the Dow both sit just off record territory, the Nasdaq is still well off the heights of the 5,000 level touched in 2000 at the height of the internet bubble.

But despite not touching all-time highs, the tech index has enjoyed stronger long-term gains than the Dow or S&P.

Since 1991, the Nasdaq has gained 982 per cent, while the S&P and Dow are up 448 per cent and 511 per cent respectively in that same time period.

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