• by Thom Forbes  @tforbes, May 23, 2014

Amidst continuing decline from two companies that once epitomized the expansive American Dream — Sears and Hewlett Packard — we also learned yesterday that existing home sales in April showed an upward tick, and there are more properties to choose among, giving writers a hook to hang a little optimism on.

“A bigger supply of properties lured buyers and raised prospects for a stronger spring buying season,” reportsBloomberg Businessweek’s Michelle Jamrisko. “The 1.3% gain, the first this year, pushed sales to a 4.65 million annualized rate, National Association of Realtors data showed today. The number of available properties climbed to an almost two-year high, helping slow the pace of price appreciation.”

“More housing inventory gives buyers better choices, and takes the pressure off of the buying process, which is a welcome sign, especially for first-time buyers,” NAR president Steve Brown says in a release detailing the data. As Jamrisko points out, “a pickup in real-estate listings that improves affordability will help bring homeownership within reach of more Americans, increasing the odds the industry will recover from a yearlong slowdown.”

“But the pace is still almost 7% below April 2013 and the four-month average for this year trails last year's by about the same percentage,” Doug Carroll reports in USA Today. “The sales rate was consistently over 5 million last May through October.”

Indeed, Sterne Agee economist Lindsey Piegza characterizes the activity as “tepid,” observing that single-family sales only rose 0.5%, with most of the gains in what the Wall Street Journal’s Jonathan House describes as the “volatile” multiple-family segment. 

House also points to a survey of National Association of Home Builders members that “shows builders' confidence falling to its lowest level in a year, which could be a bad sign for future construction.”

On a positive note, the Conference Board’s Leading Economic Index “rose sharply again in April, after two large gains in February and March,” economic consultant Joel L. Naroff blogs on Philly.com. “If this index has any forecasting ability, it is telling us that the first-quarter slump is well behind us. And that idea is being reinforced by the labor market data.”

But those data are going to be pulled downward by an influx of 11,000 to 16,000 workers that will be laid off in coming months by Hewlett Packard, which had already cut 34,000 jobs since May 2012. The company yesterday reported “the eleventh-straight quarter of lower revenue, according to data from S&P Capital IQ,” Matt Krantz writes in USA Today. “The result is a continuing erosion of the ranks at what was once one of Silicon Valley’s biggest and most respected employers.”

Under Meg Whitman, the company is facing “The Classic Dilemma,” as the hed on Forbes contributor Tim Worstall’s column points out. “How Do You Thrive In A Declining Market?”

“HP, until recently the world’s largest technology company in terms of revenue, has been battered by deep changes in both consumer and business behavior,” writes Quentin Hardy in the New York Times. “Sales of personal computers, its largest area of business, have been hurt in recent years by competition from tablets and smartphones.” And “businesses [are] increasingly rent computing via large cloud systems.”

Sears, meanwhile, which was “at one time the largest U.S. department-store chain, profitable and generating cash,” has embarked on the equivalent of “a long-term liquidation sale,” one analyst told Bloomberg’s Tara Lachapelle last week when it announced that it was considering a sale of Sear’s Canada. 

“After Sears Canada, you look at what remains and there’s not a whole lot before you get to the scrapping and junking,” said Louis Meyer, a special situations analyst at Oscar Gruss & Son. 

Meyer’s pessimism was borne out by today’s headlines, such as the one in the New York Timesreading: “Sears Posts Worst Report of a Bad Lot in Retailing.” Revenue fell 6.8% and it lost $402 million in the first quarter as opposed to a loss of $239 million in 2013.

“Sears has been trying to transform its traditional retail business to a store that focuses on selling products to members, and the membership is growing,” Elizabeth A. Harris reports. “…But many analysts doubt the [Shop Your Way rewards] program’s worth, as it essentially gives discounts — and margin — away for nothing.

“Other than Groucho Marx, who famously would not join a club that would accept him, why wouldn’t someone join a free club that offers discounts?” Credit Suisse analyst Gary Balter wrote in a note to investors quoted by Harris. “Shop Your Way is not Amazon Prime, where one pays to belong.”