Stocks moved higher on Tuesday, with Home Depot at a record high and buoying the blue chips, while investors awaited Congressional testimony from the Federal Reserve chairman, Ben S. Bernanke, on Wednesday.
By afternoon the Standard Poor’s 500-stock index had gained 0.4 percent, the Dow Jones industrial average rose 0.5 percent and the Nasdaq composite was 0.3 percent higher.
The housing market recovery helped Home Depot report higher quarterly sales and earnings, prompting the world’s largest home improvement chain to boost its sales outlook for the year. Its shares rose 3 percent to $79.05 after hitting a record of $79.40.
Housing will continue to be a tail wind for stocks and an engine for economic growth in the foreseeable future, according to Jack De Gan, chief investment officer at Harbor Advisory Corp. in Portsmouth, N.H.
The United States economic calendar is thin and the market will continue to be vulnerable with the S.P. and Dow industrials near record highs. However, the expectation of continuing accommodative monetary policy from the Federal Reserve should continue to lend support to equities.
“There’s not strong enough evidence one way or another to change monetary policy,” Mr. De Gan said, adding that with all the support the Fed has given to equities there are also “fundamental reasons” driving the market.
The small- and mid-cap Russell 2000 continued to face technical resistance at the 1,000 point level but was within two pints of its all time closing high.
Goldman Sachs said in a note to clients dated May 20 that it expected the S.P. 500 to be at 1,750 points by the end of the year, a 5 percent advance from Monday’s close, and predicted a 12-month rally to 1,825. The bank’s economists forecast above-trend growth in 2014 in the gross domestic product.
The Carnival Corporation sharply reduced its full-year earnings outlook for the second time in less than three months. The company said it expected lower revenue because it has lowered ticket prices to attract passengers after a string of prominent mishaps. Its United States shares dropped 5.6 percent.
Best Buy, the consumer electronics chain, reported weaker-than-expected quarterly sales and warned that investments to win back shoppers could squeeze earnings in the near term. Its shares fell 5.1 percent.
Shares of JPMorgan Chase rose 2 percent on reports that shareholders had defeated a proposal to strip the bank’s chairman and chief executive, Jamie Dimon, of his chairman title.
Apple’s chief executive, Timothy D. Cook, testify before Congress after a Senate report on the company’s offshore tax structure said it had kept billions of dollars in profits in Irish subsidiaries to pay little or no taxes to any government. Apple shares fell 0.1 percent.
The medical device maker Medtronic reported a better-than-expected quarterly profit driven by strong international sales and its shares rose 5 percent.
The Eurofirst 300 index of top European shares ended the trading day up 0.1 percent, as traders took the uncertainty over central banks’ stimulus policies as a cue to lock in some of the recent sharp gains.
Earlier in the day, Japan’s Nikkei share index crept to a five-and-a-half-year high. The yen shed some of Monday’s gains after Japan’s economy minister said his comments the previous day that the government was satisfied with the level of the currency had been misinterpreted.
A recent downward slide in precious metals also resumed. Gold was down 1.1 percent, at $1,368 an ounce, as the stronger dollar left it facing its eighth fall in nine sessions.
Silver dropped as much as 2.2 percent to trade near the two-and-a-half-year lows hit during a 6 percent slide on Monday, when an unidentified investor sold off a large holding.
While low inflation prospects have dulled demand for traditional hedge gold, silver has fallen out of favor with investors recently as demand from the solar energy sector has sagged and silver mining has increased.
“The market was caught horribly short yesterday,” said David Govett, head trader at Marex Spectron, “so there was some buying this morning. But the dollar started to get stronger and gold didn’t manage to break above $1,400, so sales started again.”
Article source: http://www.nytimes.com/2013/05/22/business/daily-stock-market-activity.html?partner=rss&emc=rss
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