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Home-builders Pullback Despite Lower Bond Yields

|Includes:iShares U.S. Home Construction ETF (ITB)

This morning, many of the leading home-builder stocks are coming under some selling pressure. The decline in the home-builder stocks comes despite a lower bond yield. Recently, the home-builder stocks have been trading inversely with the 10-year U.S. Treasury Note. Basically, when bond yields rise the home-builder stocks decline and vice versa. Today, the 10-year U.S. Treasury yield is lower by 3 basis points to 2.56 percent and the home-builder stocks are still struggling on the session.

Some of the leading home-builder stocks that are declining lower today include Toll Brothers Inc (NYSE:TOL), Lennar Corporation (NYSE:LEN), and Ryland Group, Inc. (NYSE:RYL). Traders that want to track the entire industry group can follow the iShares Dow Jones US Home Const. (ETF) (NYSEARCA:ITB).

Today, the ITB will have intra-day chart support around the $23.00, and $22.47 levels. The daily chart of the ITB is still trading below the important 50-day moving average which continues to put the important sector in a weak technical position. Traders should remember, the home-builder sector is a major part of the U.S. economic recovery. Many of the jobs that are being created in the United States come from the construction industry. Should the home-builder sector slow down it could have a negative effect on economic growth in the United States.

Nicholas Santiago

Stocks: ITB