Shares gain 20% in one day

Yesterday I wrote about how homebuilder stocks were finally starting to reverse course for the better after news of a 2.1% gain in pending home sales gave investors hope that the worst might just be over.

Another company that is building impressive gains based on the hope of a housing recovery is Louisiana-Pacific (LPX). The manufacturer of wood building products saw its shares surge 20% higher today to $2.70.

The move helps to solidify a sharp reversal of course since just one month ago when Louisiana-Pacific’s shares touched a 52-week-low of $1.03.

Pending home sales give builders a boost

Shares of homebuilders are mostly higher today as investors applaud a 2.1 percent increase in February pending home sales. According to the National Association of realtors the same index declined 1.4 percent over the same period one year earlier.

Here’s a glance at the major homebuilder stocks:

D.R. Horton (DHI) UP 3.32% to $10.02
Toll Brothers (TOL) UP 2.15% to $18.55
Pulte Homes (PHM) UP 2.47% to $11.20   
Lennar Corp (LEN) DOWN 2.66% to $7.31
KB Home (KBH) UP 2.20% to $13.47
Centex Corp (CTX) DOWN 2.34% to $7.50
Ryland Group (RYL) UP 0.54% to $16.75
Hovnanian Enterprises (HOV) UP 5.06% to $1.64

One niche retailer is bucking the recession

Teen retailer Hot Topic (HOTT) continued its skyward momentum today as it closed at a new 52-week-high of $11.19 a share.

Shares were helped by an analyst from Boenning & Scattergood who boosted Hot Topic’s price target to $13 from $10.50 and cited a positive mix of both new products and store events.

Hot Topic has been on fire during the last year despite a recession that has pummeled many other niche retailers. The company has seen its stock climb from under $5 a share to over $11 with no signs of slowing.

Automakers must change radically to avoid bankruptcy

Investors were given a sharp if not painful reminder of just how ill General Motors and Chrysler remain after President Barack Obama and his administration renewed pressure on the pair this morning.

The government asked for and received the resignation of GM CEO Rick Wagoner and also demanded that Chrysler form a partnership with Fiat as a condition to receive further taxpayer aid.

Under President Obama’s plan for the auto industry, GM will be given one last chance to produce a plan for viability along with funding for the next 60 days in which to do it. Chrysler will be given only 30 days to pair with Fiat.

The plan also stipulates that if GM and Chrysler do not make major strides towards viability the Obama administration may cut government funding and force either or both companies into bankruptcy. For further details about the plan, click here.

GM shares are down 20.99 percent to $2.86 a piece in heavy trading. The auto industry crisis is also spilling across the broader market leaving the bears firmly in control. The Dow is lower by 289.20 points and the Nasdaq is lower by 53.67 points.