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By Carlos Guillen
By David Urani

So far into this earnings-season, equity markets have been experiencing rather sharp fluctuations, and today is no exception. In fact, the Dow Jones Industrial Average began today's trading session on a slide as the economic data presented today was not what investors had hoped for. However, stocks appear to be on their way up, headed for green territory.

For starters, Caterpillar's financial results were a bit worrisome. This Dow component, seen by many as a bellwether for global economic growth, not only delivered weaker than expected earnings and revenues but also provided a downbeat full-year outlook. According to management, the company experienced weakness in its mining business and expects a continued slow global economic growth backdrop.

Housing data presented earlier today did not serve to give stocks a lift either. According to the NAR, existing home sales declined 0.6 percent month-over-month in March to a seasonally adjusted annual rate of 4.92 million units, below the Street's 5.01 million expectation. Given the low interest rate scenario that has been induced by the Fed, the housing market has been on an encouraging recovery trend, and consumers have been gaining confidence as their perceived wealth has increased as their home investments have gained traction. However, this most recent decline in demand may serve to take some of that confidence away in the near term; more on this below.

Perhaps already expected was that finance ministers from the G-20 largest economies signaled approval of Japan's aggressive stimulus measures. Clearly, easy money from around the world is always seen quite positively by equity markets, but this has turned into an expectation by investors, so they no longer react as enthusiastically as they used to.

In all, despite the early slide in stocks, equity markets have made a nice recovery and are now headed for winning ground, with the NASDAQ already up 0.5 percent and the S&P 500 up 0.16 percent, but the Dow still in the red although not by much, just down 0.14 percent. The rest of this week we expect to see lots of volatility as the majority of Dow components will be delivering financial results.

Existing Home Sales

March existing home sales came in at 4.92 million annually adjusted, down 0.6% from February and below the 5.0 million consensus estimate. Much of the data in the housing market of late has fallen a bit flat, and this is one more report that supports that trend. That being said, with a change of less than a percent you could almost call it negligible when you consider that the number is annually and seasonally adjusted (that's possibly why housing stocks are largely flat on the day); nevertheless one would have liked to see it go higher.

For me, one factor that's been a bit of a wild card is the fact the winter lasted extra long this year, perhaps negatively affecting the start of the typical spring selling season. Yet the declines in March were in the south and west (northeast was flat and midwest up modestly) which somewhat goes against that theory. Furthermore, sales were up 10.3% year over year in March versus 9.5% in February.

On the positive side, median prices were at their highest point since August. Months' supply of homes did edge a little higher to 4.7 months from 4.6 months but relatively speaking that's still a very low level.

Reading the press release, the NAR makes an interesting point (although note they do tend to be perma-bullish) where they claim buyer traffic is up 25% from year ago levels, but with inventory for sale well below last year. Thus, it's possible more available inventory would yield more sales.