This Article is From May 21, 2013

Wall Street drifts near record, Home Depot buoys Dow

Wall Street drifts near record, Home Depot buoys Dow
New York:

Wall Street was little changed in early trading on Tuesday while investors eyed congressional testimony from Federal Reserve chairman Ben Bernanke on Wednesday.

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 2.3 per cent to $78.53 after hitting a record of $79.40.

Housing will continue to be a tailwind 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, New Hampshire.

The US 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," De Gan said, adding that with all the support the Fed has given to equities there are also "fundamental reasons" driving the market.

The Dow Jones industrial average fell 7.27 points or 0.05 per cent, to 15,328.01.

The S&P 500 lost 3.27 points or 0.2 per cent, to 1,663.02.

The Nasdaq Composite dropped 8.6 points or 0.25 per cent, to 3,487.84.

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 sees the S&P 500 at 1,750 by the end of the year, a 5 per cent advance from Monday's close, and expects a 12-month rally to 1,825. The bank's economists forecast above-trend US gross domestic product growth in 2014, for the first time in six years.

Shares in JPMorgan Chase & Co rose 1 per cent to $52.86 as a proposal to strip chief executive Jamie Dimon of his chairman title appeared to be defeated according to a preliminary tally reported by The New York Times.

Apple chief executive Tim Cook is expected to testify before Congress later on Tuesday after a US Senate report on the company's offshore tax structure said the iPhone maker has kept billions of dollars in profits in Irish subsidiaries to pay little or no taxes to any government. (Read: Ireland rejects blame for Apple's low tax rate)

Apple shares fell 1.7 per cent to $435.44.

Medical device maker Medtronic Inc reported a better-than-expected quarterly profit driven by strong international sales and its shares rose 6.3 per cent to $53.05 after hitting $53.83, its highest since September 2008.

Carnival Corporation & Plc slashed its full-year earnings outlook for the second time in less than three months as it expects lower revenue due to the lower ticket pricing it is employing to attract passengers following a string of high-profile mishaps. Its US shares dropped 6.2 per cent to $31.13.

Best Buy shares fell 3.9 per cent to $25.77 after the world's largest consumer electronics chain reported weaker-than-expected quarterly sales and warned that investments to win back shoppers could squeeze profits in the near term.

Copyright @ Thomson Reuters 2013