Furniture Stocks Mirror Market Losses

August 12, 2007  by in UnCategorized   

By Home Furnishings Business in on August 2007 Pummeled by housing woes, increasing gas prices and interest rates stagnation, three of the most-widely watched stock market indices ended last week substantially off from the high numbers they recorded just a few weeks ago.

Furniture stock prices slid in parallel with the indices, with only three companies—Havertys, Tempur-Pedic and Sealy—finishing the week with stock prices higher than their close a month earlier. Friday stock prices for Havertys, Tempur-Pedic and Sealy were $12.51, $29.33 and $15.70, respectively, up from their month-earlier prices of $12.31, $27.54 and $15.40.

Scant weeks ago, the Dow Jones Industrial Average (DJIA) set a record high of 14,121, and stock market analysts debated how much higher it would go before reaching a plateau. At the close of the business day on Friday, the DJIA finished the week at 13,239.54, a drop of nearly 900 points, or 6.2 percent, from its peak.

The Nasdaq composite fell from 2,651.79 on July 10 to 2,544.89 on Friday, a decline of 4 percent. The Standard & Poor’s 500 slipped 4.3 percent to 1,453.64.

Adding to analyst angst is the decision by the Federal Reserve Board to hold rates steady last week on its Fed Funds rate, the interest rate charged to banks. Noting the steady rise in home foreclosures, Wall Street pundits pushed for a lower interbank rate, hoping banks would use the lowered interest rate to offset, or cushion, the substantial, and sometimes staggering, mortgage increases holders of Adjustable Rate Mortgages (ARM) are facing.

Stock market analysts are bracing for a volatile week due to the scheduled release of monthly data on inflation, retail sales and housing starts.