What Happened?
A number of stocks fell in the afternoon session after concerns about the health of the U.S. economy grew following a significant downward revision of job market data.
The Labor Department reported that employers added 911,000 fewer jobs from April 2024 through March than initially estimated. These "benchmark revisions" are issued annually to more accurately account for new and defunct businesses. The report detailed that the leisure and hospitality sector added 176,000 fewer jobs, professional and business services 158,000 fewer, and retailers 126,000 fewer. This weaker-than-expected data has fueled investor anxiety, as it suggests businesses may be becoming more reluctant to hire amid economic uncertainty. The numbers issued are preliminary, with final revisions scheduled for February 2026.
JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Home Construction Materials company Masco (NYSE: MAS) fell 3.3%. Is now the time to buy Masco? Access our full analysis report here, it’s free.
- General Industrial Machinery company Columbus McKinnon (NASDAQ: CMCO) fell 3.1%. Is now the time to buy Columbus McKinnon? Access our full analysis report here, it’s free.
- Home Construction Materials company Fortune Brands (NYSE: FBIN) fell 3.6%. Is now the time to buy Fortune Brands? Access our full analysis report here, it’s free.
- Home Builders company Lennar (NYSE: LEN) fell 3.7%. Is now the time to buy Lennar? Access our full analysis report here, it’s free.
- Home Builders company KB Home (NYSE: KBH) fell 3.5%. Is now the time to buy KB Home? Access our full analysis report here, it’s free.
Zooming In On Lennar (LEN)
Lennar’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 25 days ago when the stock gained 4.3% on the news that a regulatory filing revealed that famed investor Warren Buffett's Berkshire Hathaway had taken a significant new stake in the homebuilder. The move is seen by investors as a major vote of confidence from the legendary investor in the U.S. housing market. According to the filing, Berkshire Hathaway's stake in Lennar is valued at approximately $798.7 million, representing a dramatic increase to 7.23 million shares. This investment was one of three 'mystery stocks' that Berkshire had been accumulating with permission from the SEC to keep the purchases confidential while it built its position. Buffett's bet on homebuilders like Lennar suggests he may believe the worst is over for the housing sector, potentially seeing a long-term opportunity as the U.S. faces a need for more housing stock despite current high mortgage rates.
Lennar is up 2.6% since the beginning of the year, but at $137.81 per share, it is still trading 28.4% below its 52-week high of $192.45 from September 2024. Investors who bought $1,000 worth of Lennar’s shares 5 years ago would now be looking at an investment worth $1,818.
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