Stocks turn higher as investors shrug off earnings
EmptyNEW YORK -- Wall Street managed a moderate advance in an unven session Tuesday after a drop in oil prices and encouraging comments from a Federal Reserve official allowed investors to shrug off disappointment over Home Depot Inc.'s declining sales. The Dow Jones industrials set another closing high.
Home Depot, the world's largest home improvement retailer, said sales at stores open more than a year dropped in the fourth quarter, suggesting that consumers' appetite for home improvement goods is still dwindling due to the sluggish housing market.
The company's results sent the market down in early trading. But comments from outgoing Fed Governor Susan Bies, who said slumping demand for housing may have bottomed out, alleviated some concerns about the downturn dragging down the rest of the economy. Her remarks echoed those of Fed Chairman Ben Bernanke last week, who predicted that the economy will keep growing at a modest pace.
"The overall trend of the market is basically positive," said Brian Gendreau, investment strategist for ING Investment Management, pointing to Bernanke's recent forecast of moderating growth and cooling inflation. "That's a great environment for equities. Unless you have some specifically nasty news, there's no reason why the trend shouldn't be upward."
Falling oil prices, which tumbled $1.32 to $58.07 a barrel on the New York Mercantile Exchange on forecasts of warmer weather, also lent some support to stocks, as did a proposed merger between XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc.
According to preliminary calculations, the Dow rose 19.07, or 0.15%, to 12,786.64, after falling more than 60 points earlier in the day. It was the index's 31st record close since early October. The Dow also reached a new trading high, 12,795.93, just short of 12,800.
Markets were closed Monday for Presidents Day.
Broader stock indicators also turned higher. The Standard & Poor's 500 index rose 4.16, or 0.29%, to 1,459.70, and the Nasdaq composite index climbed 16.73, or 0.67%, to 2,513.04.
Bond prices rose slightly, with the yield on the benchmark 10-year Treasury note at 4.68%, down from 4.69% late Friday. Bies' comments helped support Treasurys, which in turn added some fuel to the stock market's advance.