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Wall St gets lift from Home Depot

Tuesday, August 19 15:38:22

U.S. stocks rose today, after solid earnings from Home Depot and supportive economic data on inflation and the housing market.

Home Depot gained 4.1 percent to $86.99 as the biggest boost to both the Dow and S and 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 percent 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 percent 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 percent, to 16,881.74, the S and P 500 gained 4.78 points or 0.24 percent, to 1,976.52 and the Nasdaq Composite added 10.53 points or 0.23 percent, to 4,518.84. (Reuters)

For more visit: www.businessworld.ie