For Immediate Release

Chicago, IL – February 25, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: D.R. Horton (DHI), USG (USG), Fortune Brands (FO), United Technologies (UTX) and Home Depot (HD).

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Here are highlights from Wednesday’s Analyst Blog:

New Home Sales Plunge

With the exception of the 2001 downturn, new home sales fall sharply just before we enter a recession, and then tend to bottom just as the recession ends or a little before the end.

They then rise sharply in the early stages of economic recoveries. As they do, they become one of the principal locomotives driving the economy out of recession. If new homes are not selling, then any new houses that are produced simply sit in inventory. Home builders cannot afford to sit on that inventory very long, and have to cut back on production.

Each new house build generates an enormous amount of economic activity. Think of the number of carpenters, plumbers and electricians that are employed in the building of a house. Then think of the amount of lumber, wall board and cement that goes into building a new house. Furthermore, most of the materials used tend to be domestically produced rather than imported (or, if imported, tend to come from Canada).

The decline in sales is extremely bad news not just for Homebuilders like D.R. Horton (DHI), but for a wide range of firms big and small. Firms like USG (USG) which make wallboard are going to suffer, as will Fortune Brands (FO) with its plumbing and Cabinetry operations. Even giants like United Technologies (UTX) will feel the pinch in their heating and air conditioning divisions.

Of course, building fewer houses also means fewer construction jobs, so the progress on the unemployment front is going to be even slower than we thought, which has bearish implications for retailers, especially the hardware stores like Home Depot (HD), which get hit with the double whammy of fewer sales of tools and materials, directly from the slowdown, as well as the fact that the unemployed have less income to spend.

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