NEW YORK (AP) — Homebuilders were one of the few bright spots during a huge stock sell-off Wednesday, with hopes rising that a rush by investors into the bond market would drive mortgage rates lower.
The Dow Jones industrial average dropped as much as 460 points as investors fled to the safety of bonds, which are a safe haven for cash during market sell-offs. In late afternoon trading, the Dow was down 221 points, or 1.4 percent, to 16,094.
As bond prices rise, yields drop. The 10-year Treasury note briefly fell below 2 percent for the first time since June 2013. It recovered to 2.14 percent in afternoon trading.
The meager yields in bonds can drive mortgage rates lower. Rising mortgage rates have been one of the reasons that so many people have been priced out of the housing market this year.
On Wednesday, as the Standard & Poor's 500 fell 1.2 percent, the housing sector moved mostly in the opposite direction.
— Shares of Beazer Homes USA Inc. rose 47 cents, or 2.9 percent, to $16.81.
— DR Horton Inc. picked up 56 cents, or 2.9 percent, to $20.59.
— Hovnanian Enterprises Inc. rose 15 cents, or 4.6 percent, to $3.43.
— KB Home gained 59 cents, or 4.2 percent, to $14.66.
— Lennar Corp. gained $1.31, or 3.4 percent, to $39.64.
— PulteGroup Inc. advanced 55 cents, or 3.2 percent, to $17.54.
— Toll Brothers Inc. added 37 cents, or 1.2 percent, to $30.35.