The Coca-Cola Company (KO): Why Buffett’s Favorite Stock Is Leading the Dow Today

Page 1 of 2

Blue-chip stocks are down today as investors and analysts weigh good news from the domestic housing sector against the ongoing economic drama in the Mediterranean. With roughly an hour remaining in the trading session, the Dow Jones Industrial Average is off by 26 points, or 0.18%.

The Coca-Cola Company (NYSE:KO)The biggest news since the weekend is that the Mediterranean nation of Cyprus is on the verge of levying a tax against bank deposits. On Sunday the country added its name to a growing list of European countries bailed out by the Eurozone and the International Monetary Fund. To fulfill its side of the 10 billion euro bailout bargain, however, Cyprus must come up with 5.8 billion euros in new revenue. And for this, it’s looking to its banking sector, long known as a haven for international riches — particularly of the Russian variety. The fear is that other countries will follow suit, thereby prompting funds to flee the continent.

On the other side of the equation, fueling bullish sentiments today was a positive report on the domestic housing market. According to data released this morning by the Department of Commerce, housing starts climbed 0.8% last month to an annualized pace of 917,000. Economists surveyed by Bloomberg had projected a figure of 915,000. Meanwhile, building permits rose by 4.6% to a rate of 946,000 — the highest level since June of 2008. This beat economists’ expectations for a 925,000 figure.

“Home building continues to recover and add to the recovery,” an economist at PNC Financial told Reuters. He went on to note that the rise in permits suggests that “we will have a solid spring.” A California-based homebuilder echoed this confidence in an interview with Bloomberg, saying: “We see a lot of positive signs out there. All the numbers were positives going into the year, and again, we have a favorable outlook for the year.”

With the latter news in mind, it’s no surprise that stocks of homebuilders are rallying today. Among others, Hovnanian Enterprises, Inc. (NYSE:HOV) is up by 3%, Toll Brothers Inc (NYSE:TOL) has gained 0.7%, and KB Home (NYSE:KBH) is up 1.9%. But as my colleague Dan Caplinger said earlier of Hovnanian: “At some point the homebuilder will need to start working its way back to profitability amid better conditions. Otherwise, investors will conclude that the stock has gotten ahead of itself, and it will give up some of its huge recent gains.”

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!