Stocks point higher as Home Depot tops forecasts

[May 19, 2009]  NEW YORK (AP) -- Wall Street signaled a moderately higher open Tuesday after Home Depot Inc. posted stronger-than-expected quarterly results.

Home Depot's fiscal first-quarter earnings rose 44 percent as the company booked fewer charges. The nation's largest home improvement chain reiterated its profit forecast for the year.

Stock futures are also higher after a sharp rally Monday as investors await data on housing permits and starts. Analysts expect that housing construction could be showing tentative signs of stabilizing after a three-year slide.

Construction of new homes likely rose to a seasonally adjusted annual rate of 520,000 in April from 510,000 units in March, according to the consensus of Wall Street economists surveyed by Thomson Reuters.

Many analysts say the housing market will need to stop its slide before the economy can hope to recover from the recession. Falling home prices not only pinch consumers but the banks that hold mortgages losing value.

Dow Jones industrial average futures rose 72, or 0.9 percent, to 8,542. Standard & Poor's 500 index futures rose 8.00, or 0.9 percent, to 915.10, while Nasdaq 100 index futures rose 3.00, or 0.2 percent, to 1,391.50.

Stocks soared Monday on reassuring news about housing and banking convinced investors to return to the stock market. The Dow jumped 235 points, making up three-quarters of last week's losses. All the major stock indicators rose about 3 percent following better-than-expected earnings at Home Depot-rival Lowe's Cos., an uptick in homebuilder sentiment and upbeat comments from analysts about U.S. banks.

Stocks fell sharply last week on worries that a recovery might be further off than hoped, interrupting a rally that has left the Standard & Poor's 500 index up 34.5 percent since March 9.

Bond prices were mixed early Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.25 percent from 3.24 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was flat at 0.18 percent.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude rose 67 cents to $59.70 per barrel in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average jumped 2.8 percent. In afternoon trading, Britain's FTSE 100 rose 2.3 percent, Germany's DAX index rose 2.4 percent, and France's CAC-40 rose 2.4 percent.

[Associated Press; By TIM PARADIS]

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