- POSTED: 20 Aug 2014 05:09
US stocks on Tuesday (Aug 19) finished with solid gains following encouraging economic data and a solid earnings report from Home Depot.
NEW YORK: US stocks on Tuesday (Aug 19) finished with solid gains following encouraging economic data and a solid earnings report from Home Depot.
The Dow Jones Industrial Average finished up 80.85 points (0.48 percent) at 16,919.59. The broad-based S&P 500 gained 9.86 points (0.50 percent) to 1,981.60, while the tech-rich Nasdaq Composite Index rose 19.20 points (0.43 percent) to 4,527.51.
Fresh US economic data showed a pickup in US housing starts after two slower months, an encouraging sign for the construction sector, and also tepid inflation, with consumer prices rising just 0.1 percent in July.
"We have fundamentals that have improved and the market now seems to be less focused on geopolitical concerns," said Peter Cardillo, chief market economist at Rockwell Global Capital.
Dow component Home Depot jumped 5.6 percent after second-quarter earnings came in at US$1.52 (S$1.89) per share, seven cents above analyst expectations. The home-improvement chain raised its 2014 profit forecast, citing strong sales. That helped boost the shares of rival Lowes, which rose 2.1 percent.
Other retailers reported firm earnings as well. Dick's Sporting Goods advanced 1.6 percent as second-quarter earnings of 67 cents per share bested expectations by two cents.
TJX, which owns retailers Marshalls, TJ Maxx and other discount retail chains, bolted 8.7 percent higher as it boosted its full-year outlook following a better-than-expected second quarter. The company now sees fiscal 2015 earnings of US$3.10-US$3.18 (S$3.86-s$3.96) per share, well above last year's US$2.83 (S$3.52) per share.
Cosmetics maker Elizabeth Arden however sank 23.3 percent as fourth-quarter sales plummeted 28.4 percent to US$191.7 million (S$239.09 million) due to steep declines in sales of celebrity fragrances, especially the Justin Bieber and Taylor Swift products.
Apple, the iPhone maker and world's largest company by market capitalisation, set a new high, its shares reaching US$100.68 (S$125.57), better than the previous high hit nearly two years ago, before the stock's 7:1 split, of US$705.07 (S$879.38). Apple shares closed up 1.4 percent at US$100.53 (S$125.38), also a new closing record.
Salix Pharmaceuticals jumped 150.5 percent on reports that Allergan might make a bid for it as part of its effort to fend off a takeover effort from Valeant.
Bond prices slipped. The yield on the 10-year US Treasury rose to 2.41 percent from 2.39 percent on Monday, while the 30-year hit 3.22 percent, up from 3.19 percent. Bond prices and yields move inversely.