KEEPING SCORE: The Dow Jones industrial average rose 67 points, or 0.4 percent, to 17,550 as of 2:04 p.m. Eastern Time. The company’s 50-day moving average is $122.19 and its 200 day moving average is $116.10. The Standard & Poor’s 500 index fell a point to 2,052. The Nasdaq composite shed four points, or 0.1 percent, to 4,979.
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Home Depot’s strong results contrast with those of department store operators Macy’s Inc and Nordstrom Inc last week, which cast a pall over the retail industry ahead of the holiday shopping season. All the metrics that involve price in the numerator are trading higher than in the past because the stock price is close to a 10-year high. The negative impact of the terrorist attacks on the financial markets is likely to fade over the next week after initial drops, even though the emotional impact may stay on, said Bernard Aw, a market strategist at IG in Singapore. “The market moved up handsomely yesterday, so we’re not losing all of the gains”. The stock returned 15.12% on a year-to-date basis and 23% in the past 12 months. Traders pushed stocks higher by midday and for much of the afternoon until the final hour of trading, when the rally evaporated.
Home Depot (NYSE:HD) last released its quarterly earnings results on Tuesday, November 17th. The stock added $1.76 to $59.63.
Underscoring the uneven performance among retailers, Urban Outfitters (URBN) dropped 3.8 percent and Dick’s Sporting Goods (DKS) lost 9.4 percent after handing in quarterly report cards that disappointed investors. The stock fell $3.85 to $36.96. The brokerage now has a buy rating on the home improvement retailer’s stock.
Sales rose 5.1% at stores open for more than a year in the latest quarter, including 7.3% in the U.S. Analysts for Credit Suisse had expected same-store sales to rise 6% in the U.S. Home Depot said it saw broad-based growth across its geographies and product categories, with particularly strength in its do-it-yourself and pro customers.
Eight of the 10 major S&P sectors were higher, with the consumer discretionary sector’s .SPLRCD 0.61 percent rise leading the advancers.
A number of other research analysts have also issued reports on HD. Credit Suisse raised their target price on shares of Home Depot from $120.00 to $135.00 and gave the company an outperform rating in a research note on Tuesday, August 18th. That would be “a psychological boost that the economy is self-sustaining enough that the Fed could get off the zero interest rate policy”, said David Chalupnik, head of equities at Nuveen Asset Management.
Adding to the positive tone, data showed United States consumer prices rose 0.2 per cent in October, in line with expectations, a sign that the drag on inflation from a strong dollar and lower oil prices was starting to ease.
PIZAC/ASSOCIATED PRESS Home Depot, the nation’s largest home improvement store chain, reported a 7% jump in third-quarter sales, beating Wall Street expectations.
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That decline resumed on Tuesday.
