Friday, April 07, 2006

US Luxury Home Builder Sinks on Outlook

Luxury home builder Toll Brothers Inc. on Tuesday slashed its forecast for home sales for the second time in three months, driving its shares down as much as 4 percent, as first-quarter new orders fell 29 percent on slumping demand.

Toll is widely seen as a bellwether for the U.S. housing market. Its deteriorating forecasts may indicate that the slowing U.S. housing market is eroding faster than previously thought.

Toll Brothers rattled the market in November when it first cut its forecast. Since then its shares, which were down 3 percent, or 94 cents, to $30.26 in early afternoon trading on the New York Stock Exchange, are off 23.2 percent. In contrast, the Dow Jones U.S. Home Construction Index has fallen 4.9 percent, its lowest level in about three months.


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