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Homebuilders gain despite rise in bond
yields (HOV, CTX, TOL, DHI)
By Tomi Kilgore
May 05, 2004
NEW YORK (CBS.MW) - Shares of homebuilders were rallying Wednesday despite
weakness in the bond market, after Hovnanian (HOV)
reported strong gains in fiscal second-quarter contracts, and amid positive
comments from Wachovia Securities. Hovnanian gained 67 cents, or 1.9
percent, to $36.55 after it said net contracts for the quarter ending April
rose 45 percent, while the dollar value of the contracts surged 62 percent.
Among others in the sector, Centex (CTX)
advanced 81 cents to $49.68, Toll Brothers (TOL)
tacked on 70 cents to $40.09 and D.R. Horton (DHI)
rose 25 cents to $29.01. Meanwhile, the yield on the 10-year Treasury note ($TNX)
was up 0.036 percentage points to 4.580 percent, and was poised to close at
the highest level in 8 months. Separately, Wachovia analyst Carl Reichardt
said in a note to clients: "Current valuations appear to be discounting
a far worse, higher-rate-created demand/supply scenario that a recovering
economy and a lack of lot supply in coastal markets would indicate."
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