Stocks of Calif. homebuilder Standard Pacific shed 10.8 percent; analysts predict more bad news for the sector.
Housing stocks down - Sep. 24, 2007

Housing stocks posted sharp losses Monday ahead of sector data and two major earnings reports scheduled for Tuesday and Thursday.

Standard Pacific Corp (Charts). led the losses, shedding 87 cents, or 10.8 percent, to $7.23 in midday trading.

Investors sold the stock lower after the California homebuilder said it would stop paying a quarterly dividend and instead use the estimated $10 million a year to pay down debt.

The company also said it was issuing $100 million in convertible debt in a move to refinance existing obligations.

Meanwhile, existing home sales data for August is due Tuesday.

Bank of America analyst Daniel Oppenheim expects a 3 percent decline. He also expects inventory levels will rise sharply, meaning further price cuts are likely.

Also Tuesday, Lennar Corp (LEN). reports fiscal third-quarter earnings. Analysts expect the company to post a loss on major charges to write down the value of inventory.

Lennar shares hit a 52-week low of $24.43 Monday, and were off 56 cents to $24.76 in midday trading.

On Thursday, an industry group reports data on sales of new homes — which directly reflects homebuilder results.

Oppenheim expects an 8 percent decline because of tightness in the credit markets that made it difficult to get a loan.

KB Home (KBH) reports quarterly results later that day.

Wall Street anticipates a loss of 75 cents per share, also because of impairment charges.

KB shares slid 70 cents, or 2.6 percent, to $26.57 in midday trading.