Shares of most public home building companies continued to Wedesday after a big jump Tuesday amid a broad and deep rally.
The S&P home builder Exchange Traded Fund (AMEX:XHB) was up 2% to $23.89 during the first hour of trading on Wednesday after gaining nearly 8% on Tuesday. The overall market was down 45 points on the Dow Jones Industrial Average in response to comments before Congress by Fed Chairman Ben Bernanke that indicated the economy could be in recession.
On Tuesday, the market surged 3.19% as measured by the Dow Jones Industrial Average, which closed up 391.47 points, 3.67% on the NASDAQ, which rose by 83.65 points, and 3.59% on the S&P 500, which closed up 47.48 points.
A trend set on Tuesday that had the lesser captialized home building companies outgaining those with stronger balance sheets reversed in early trading on Tuesday. Beazer (NYSE:BZH), Hovnanian (NYSE:HOV), and WCI (NYSE:WCI) were the only major publics that were down during the first hour of trading on Wednesday.
The builder stocks have held on to much of their gains made during the rally off the bottom in January despite overall market losses in March. On Tuesday, Lennar (NYSE:LEN) led the percentage gainers with a 13.66% jump to $21.38, up $2.57 on the day.Hovnanian (NYSE:HOV) was close behind with a 13.58% gain to $12.04. Approaching double digit percentage gains were Beazer (NYSE:BZH), which was up 9.63% to $10.36; Meritage (NYSE:MTH), up 9.47% to $21.15; KB Home (NYSE:KBH), up 8.9% to $26.93; and WCI, up 8.96% to $3.65. D.R. Horton gained 8.38% to $17.07. Centex (NYSE:CTX) rose 6.61% on news of the sale of 8,500 lots. Standard Pacific (NYSE:SPF) was up 7.2% to end the day at $5.21 as several insiders exercised purchase options. M/I was up 5.18% to $17.86. Pulte (NYSE:PUL) was up 6.14% to $15.44. Among the stronger balance sheets, NVR (NYSE:NVR) was up 4/6% to $625; M.D.C. (NYSE:MDC) up 4.52% to $45.77; Toll (NYSE:TOL)up 6.98% to $25.12; Ryland (NYSE:RYL) up 7.63% to $35.40; and Avatar(NASDAQ:AVTR) up 4.61% to $45.60.