Home Depot Stock Delivers as the Dow Soars
May 21st 2013 2:33PM
Updated May 21st 2013 3:55PM
The Dow Jones Industrial Average is making up for yesterday's drop in a big way today, and Home Depot's stock is leading the charge with a strong earnings-backed surge. The blue-chip index has bounced back nicely so far, tallying gains of 91 points, or 0.6%, by 2:20 p.m. EDT. Home Depot is spurring the charge today, gaining 3.1%, but it's hardly alone among stocks trending higher; the majority of the Dow's members are in the green. Here are the stories you need to know about today.
Home Depot surges while Travelers gets blown away
Home Depot investors are having a good day after the home improvement retailer posted earnings that topped analyst projections. The firm's $0.83 per-share first-quarter profit topped expectations of $0.76 by a significant margin, while revenue jumped 7% year over year to also beat Wall Street's expectations handily. The company also increased its full-year guidance for earnings and revenue, with the housing recovery in full swing.
This stock is looking like a near-term winner. While sales related to the destruction left by Hurricane Sandy helped the retailer's quarter, Home Depot grew its gross margin and boosted same-store sales growth by nearly 5%. As the housing market continues to heat up, this company is well-positioned to supply consumers returning to the market. Keep an eye on Lowe's earnings tomorrow, which will show how Home Depot is competing with its top rival.
On the other side of the Dow, Traveler's has fallen 2.2% in the aftermath of Monday's severe tornado in Oklahoma. Tornadoes in Missouri and Alabama in 2011 hampered the insurer's finances that year, and with yesterday's storm predicted by some to be the most destructive in Oklahoma's history, Traveler's and other property insurers will feel the impact from damage claims. Joplin, Missouri's tornado in 2011 ranks as the country's most-damaging twister in history with an estimated $2.8 billion in economic losses, but this recent storm could surpass it when damage totals are complete.
JPMorgan's having a better day, up 1.8% to rank among the top Dow leaders. CEO and Chairman Jamie Dimon has been under pressure by some shareholders to split his two roles, but today the bank's shareholders rejected the proposal and preserved Dimon's dual role. The company's board of directors also survived the shareholder vote after some had called for new voices on the board. JPMorgan's losses in the past year, centered on the multibillion-dollar "London Whale" trading fiasco, have caused some question the company's leadership, but today's vote proved shareholders' faith in Dimon and the board.
Finally, Microsoft shares haven't moved much today, but the company's making a big move with the announcement of its next-generation Xbox One entertainment and gaming console. The Xbox One marks Microsoft's first offering of a new console since the Xbox 360 was unveiled back in 2005. Many gaming-industry analysts have criticized the current console generation's longevity as damaging to video game sales, so competitor Sony's previously announced PlayStation 4 and the new Xbox One have sparked plenty of optimism about a brighter future in the industry. Microsoft plans to launch the Xbox One by the end of the year -- a plan similar to Sony's PS4 launch.
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The article Home Depot Stock Delivers as the Dow Soars originally appeared on Fool.com.Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Home Depot and Lowe's. The Motley Fool owns shares of JPMorgan Chase and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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