Upbeat earnings, housing reports pump up stock market
NEW YORK — A summer swoon for the stock market appears to be over for now.
The Standard & Poor's 500 index closed within six points of its all-time high on Tuesday, less than two weeks after slumping on concerns about rising tensions in Iraq and Ukraine.
Investors were encouraged by economic reports that suggested growth may be poised to pick up, while inflation remains subdued. A pair of company earnings hinted that consumers are getting more confident and spending more.
Home Depot, the nation's largest home improvement retailer, raised its annual profit forecast because of a strong spring selling season. TJX, the parent company of T.J. Maxx, Marshalls and other stores, climbed on strong earnings.
“The economic reports ... have been coming out better than expected,” said Robert Pavlik, chief market strategist at Banyan Partners. “There's been a shift in the focus of investors away from some of the geopolitical events.”
The S&P 500 gained 9.86 points, or 0.5 percent, to 1,981.60. The index is up 1.4 percent for the week and is approaching its record close of 1,987.98, reached on July 24. The Dow Jones industrial average rose 80.85 points, or 0.5 percent, to 16,919.59. The Nasdaq composite climbed 19.20 points, or 0.4 percent, to 4,527.51.
TJX was the biggest gainer in the S&P 500 on Tuesday. The company's stock rose $4.66, or 8.6 percent, to $58.56 upon reporting that its quarterly income climbed 8 percent as sales strengthened at home and abroad. The results beat the estimates of Wall Street analysts. TJX subsequently lifted its full-year earnings forecast.
Home Depot jumped $4.64, or 5.6 percent, to $88.23. The company said its quarterly income surged 14 percent. Spring is the biggest season for home-improvement retailers as homeowners work on their yards and gardens. Home Depot has also been helped by an improving housing market.
“Home Depot's earnings give you a measure of confidence in housing, to an extent, and a measure of retail confidence,” said JJ Kinahan, chief strategist at TD Ameritrade. “Those are two areas where we like to look to see how the consumer is really feeling.”
After rising to a record in July, stocks slumped in the first week of August. The S&P 500 index fell as much as 4 percent from its record close to 1,909.57 on Aug. 7, as investors worried about tensions between Russia and the West over Ukraine and the implications for global growth.
A report that showed inflation remains subdued also gave stocks a lift.
U.S. consumer prices rose in July at the slowest pace in five months, held back by a drop in gasoline prices. Consumer prices edged up 0.1 percent, after larger gains of 0.3 percent in June and 0.4 percent in May. If inflation remains constrained, investors judge that the Federal Reserve will be able keep its key interest rate low for longer.
The Fed is winding down its economic stimulus but hasn't yet said when it will start raising interest rates.
Beauty products company Elizabeth Arden was one of the big losers.
The company slumped after reporting lower sales and a loss that was bigger than analysts' had expected. The company said the decline in sales of celebrity fragrances, particularly the Justin Bieber and Taylor Swift scents, was steeper than had been anticipated. Arden's stock dropped $4.56, or 23 percent, to $15.05.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Demand for surveillance systems boosts sales for Vector Security
- Fed slashes its emergency power options in crisis
- Stocks dip on lower holiday spending fears
- IMF adds China’s yuan to basket of top currencies
- Distractions can help keep riders alert in self-driving cars, study finds
- Pennsylvania Game Commission reaps revenue from shale gas under game lands
- Cyber Monday increasingly a ‘blah-iday’ as deals rolled out earlier, longer
- Energy Spotlight: Minking Chyu
- Yahoo investors losing patience with ‘star’ CEO Marissa Mayer