New Home Sales Fall to Record Low in July

Previously, May's sales were the slowest on record, but the results were revised upwards, making the month's sales pace the second-slowest on record. June's sales figures were revised downward to an annual pace of 315,000.

So, what does this mean for the market? Basically this data is a signal that the economic recovery that many assumed was in full flow may actually be waning. The news pushed the stock market lower -- we saw a 48-point drop in the first hour.

Will the day's fall continue? Possibly, especially as the home sales data combines with the news that durable goods orders increased less than expected. Orders for durable goods increased 0.3% in the past month, a far cry from the expected increase of 2.8%

As the day's second hour of trading started, the Dow was nearly 58 points lower. I would suspect that the market will hover near this level throughout most of the day. Watch for some optimism to creep in as investors and analysts will note that with data so poor that the only way to go is up. Nevertheless, I expect the reality of a sluggish economic recovery to settle in and the market to finish lower.