NEW YORK, Aug 19 — US stocks rose today, after solid earnings from Home Depot and supportive economic data on inflation and the housing market.
Home Depot gained 4.1 per cent to US$86.99 (RM274.63) as the biggest boost to both the Dow and S&P 500. The world’s largest home improvement retailer reported earnings and revenue that topped Wall Street expectations and raised its full-year profit forecast.
“It’s been very mixed in the retail world and a company like Home Depot, there is a multiplier effect there,” said David Donabedian, chief investment officer at Atlantic Trust in Baltimore.
“It is retail but it also feeds into the perception of what is happening in the housing market, which finally seems to have turned positive. That is huge for the economy.”
Housing starts rebounded strongly in July, as groundbreaking surged 15.7 per cent to a seasonally adjusted annual 1.09-million unit pace to halt two straight months of declines and top expectations for a 969,000-unit rate.
In addition, the Consumer Price Index edged up 0.1 per cent last month, in line with expectations, which could give the Federal Reserve reason to keep interest rates low for a while.
“The Fed wants to see a pick-up in economic activity to raise their confidence that we are in a solid expansion, and the housing starts data certainly does that. At the same time, the very low inflation reading doesn’t give them any cause for panic on the inflation front,” said Donabedian.
Minutes from the Federal Reserve’s July meeting will be released on Wednesday. Investors will also closely monitor the Aug. 21-23 annual meeting of top central bankers at Jackson Hole, Wyoming, for possible insight about the path for monetary policy.
The Dow Jones industrial average rose 43 points or 0.26 per cent, to 16,881.74, the S&P 500 gained 4.78 points or 0.24 per cent, to 1,976.52 and the Nasdaq Composite added 10.53 points or 0.23 per cent, to 4,518.84.
TJX Cos gained 6.6 per cent to US$57.45 and Urban Outfitters rose 4.2 per cent to US$38.47 after quarterly results. The S&P retail index climbed 1.5 per cent and is up more than 5 per cent for the month.
Elizabeth Arden tumbled 24.8 per cent to US$14.75 after the company reported the biggest quarterly loss in its history due to a steeper-than-anticipated fall in sales of celebrity perfumes.
Retailer Dick’s Sporting Goods advanced 5.3 per cent to US$45.83 after second-quarter results topped analysts’ forecasts.
Aeropostale shares jumped 12 per cent to US$3.63. The apparel retailer said it had reappointed Julian Geiger as chief executive and forecast a smaller loss than its earlier view. — Reuters
