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.

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

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.

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.

Shares of home furnishings retailer Kirklands broke through a 52-week-high of $4.52 when they touched $4.69 this morning. Shares have since pulled back slightly and remain at $4.49 which is a 0.22 percent loss over yesterday’s close.

Kirklands reported favorable fourth quarter results on March 20. Highlights included a 5.3 percent climb in comparable store sales and an increase in available cash to $36.4 million. The company also noted that it ended the year without debt or any draws on its line of credit.

Investors are continuing to bid shares generally higher on the positive news.

One headwind that could slow Kirklands’ momentum is company founder Carl Kirkland’s recently reported plan to sell up to 1,400,000 shares over a two-year period commencing on April 24, 2009.

Kirklands is clearly outperforming its once much larger rival Pier 1 Imports, who’s market cap stands at $53.56 million as compared to Kirklands’ $88.37 million.

Ann Taylor (ANN) has been on a downward trend for more than two years. In the last 52-week-period the clothing retailer’s stock has fallen from $29.23 to as low as $2.41. The company also faces an extensive restructuring plan which would shutter 163 stores by 2010.

However, better days may be in store for the company. At least that’s what CEO Michael Nicholson and director James J. Burke Jr. are betting on. Both have made sizeable purchases of stock with Nicholson purchasing 100,000 shares at $3.48 on March 13 and Burke purchasing 125,000 at $4.30 on March 18.

With shares closing 18.88% higher today at $5.54, the bet looks to be paying off handily for the pair so far.

Zale Corp (ZLC) is trading 14.63% higher today with shares currently at $1.88 a piece. That’s a slight pull back an early-morning high of $2.20 which represented a 34% gain over yesterday’s close.

In the last 52 weeks shares of Zale have traded as high as $42.23 and as low as $.89.

Shares of Zale appear to be rallying in sympathy with Signet Group (SIG) which is more than 9% higher at the moment. Signet, the operator of Kay Jewelers and Jared the Galleria of Jewelry indicated in a release today that despite weak fourth quarter results which included a 19 percent plunge in sales, its current fiscal year was off to an encouraging start.

After throwing everything including the kitchen sink at the market the Obama administration finally compelled stocks to pose a significant and sustained move higher over the last couple of weeks capped by yesterday’s 497.48-point Dow gain.

The rally now feels a bit overdone. The S&P 500 has staged its largest gain since 1938 after surging by more than 22 percent from the low it made on March 9. It seems unlikely that the market can sustain a further significant move higher over the near-term.

There are a few significant issues that still loom large over the stock market and its recovery:

Effectiveness of government plans unknown
Aside from its bailouts and buy-ins, the government’s new plan takes aim at toxic assets by seeking a partnership with private investors. It’s unknown whether or not the plan will work over the long term and stimulate new bank lending activity.

Unemployment rate remains high
Many states across the nation are facing unemployment rates unseen in more than 20 years. While stocks traditionally trade in advance of most general economic indicators, the employment rate will need to stabilize in order to allow a large segment of consumers to consume at their full potential.

Housing correction continues
Home sales spiked unexpectedly by 5.1% in February compared to the previous month of January. However, a closer look at the data shows a 15.5% plunge in the median existing-home price. Distressed sales also remained high and accounted for 45% of all transactions. It’s unclear whether or not housing has hit a distinguishable bottom.

One thing that is clear is the bulls have plenty of work left to do while the bears are catching a nap.

H&R Block (HRB) reported today that its tax season through March 15 has been slower than expected. The company cited a 3.2 percent drop in total returns.

H&R Block revealed a 5.1 percent increase in total digital returns for the same period, which included a 21.6 percent increase in the usage of the H&R Block Online service.

More consumers are hunting for bargains even when it comes to tax preparation. An increasing number of people are tackling their own taxes, or turning to software packages to help them prepare and file.

One company that’s directly benefiting from the trend is TurboTax maker Intuit (INTU) which recently reported a 10 percent increase in software usage through March 14. Shares of Intuit are currently trading at $26.18 which is well off the company’s 52-week-low of $20.18.

On the contrary, the largest brick and mortar tax prepares remain pressured by the do-it-yourself mentality of consumers. H&R Block is currently trading at $17.29 compared to a 52-weeek-low of $15.00 and Jackson Hewitt Tax Service Inc (JTX) is trading at $3.15 compared to a 52-week-low of $2.83.

Shares of Xerox are handily lower so far this trading day after the company drastically reduced its first quarter earnings estimate.

Xerox projected first quarter earnings to fall in the range of $0.03 to $0.05 - much lower than the previously expected range of $0.15 to $0.20.

The business equipment company cited a $0.06 impact from the restructuring of Fuji Xerox and generally sluggish sales. CEO Anne Mulcahy stated that cost savings would help offset the economic impact on revenue while fueling operating cash flow. Xerox expects to save $250 million from its prior restructuring efforts.

Mulcahy’s comments did little to sooth investors.

Shares of Xerox remain 17.60% lower at $4.40 a piece in afternoon trading.