Wall Street is apparently concerned that rising rates and materials prices are going to whack the public home builder stocks. So it went ahead and whacked them. CNBC reports:
A popular homebuilder-tracking ETF, the ITB, posted its worst day in three months on Tuesday, led to the downside by D.R. Horton. This comes on the heels of surging Treasury yields, which traditionally hurt housing stocks.
With the notable rise in the 10-year Treasury yield, mortgage rates have also moved higher. When you combine this with the disappointing earnings results out of Home Depot, this raises concerns about homebuilding stocks.
Key levels to watchThe ITB was already underperforming the rest of the stock market. In fact, it has spent most of the past 2½ months in correction territory and now stands 18 percent below its January highs.