United States: Stocks ride on positive earnings by Home Depot, Dudley comments

Headline indices on the US market ended higher on Tuesday, May 21, 2013, on the back of positive earnings report by Home Depot and Federal Reserve officials' comments. The Dow Jones Industrial Average rose 0.34% to a new high 15,387.58 points, while the broad-based S&P 500 gained 0.17% to close at new all-time high 1,669.16 points. The tech-rich Nasdaq Composite Index climbed 0.16% to 3,502.12 points.

Appetite for risk assets primarily underpinned by Dow component Home Depot after the world's largest home improvement chain reported a positive earnings report and raised its profit outlook, signaling the strong recovery in the housing market. Stocks extended gains in afternoon after New York Fed President William Dudley said quantitative easing remains the best monetary policy option right now, due to the uncertain economic outlook.

 

Market gains were, however, limited as market participants was looking ahead to public comments by Federal Reserve Chairman Ben Bernanke, who will testify on the economic outlook to Congress during the next trading session, on Wednesday Washington time. The Fed's $85 billion-per-month bond buying program has played a significant role in the market's rally and investors have recently become nervous over when the central bank will alter or halt the program.

At the close of business, the Dow Jones Industrial Average finished up 52.30 (0.34%) at 15,387.58. The broad-based S&P 500 added 2.87 (0.17%) at 1,669.16, while the tech-rich Nasdaq Composite Index increased 5.69 (0.16%) to 3,502.12.

Home Depot gained 2.5% to $78.71 after posting higher first-quarter sales and earnings. The company hiked its full-year earnings and sales outlook.

JPMorgan Chase shares popped 1.4% to $53.02 after shareholders voted to allow CEO Jamie Dimon to keep his chairman title.

Medtronic jumped 4.9% to $52.35 after the medical device maker produced fiscal-fourth quarter profit the exceeded Wall Street's target, with revenue beating estimates as well. Sales growth in the endovascular and structural heart units were especially robust during the quarter.

Carnival plunged 4.3% to $33.81 after the cruise line operator slashed its full-year earnings guidance to $1.45 to $1.65 a share, below market expectation.

Indian ADRs ended mostly lower on Tuesday. In the banking space, HDFC Bank dropped 0.9% and ICICI Bank moved down 1.6%. In the telecom space, Tata Communication went down 1.4%. In the IT space, Wipro rose 0.4% and Infosys added 1%.

Among others, Sterlite sank 2.5% whereas Dr Reddys declined 0.3%, and Tata Motors slipped 3.8%.

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