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Home Depot Leads the Dow Higher

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is trading higher following multiple positive reports on the housing market and better-than-expected consumer confidence numbers. As of 1:20 p.m. EST the Dow is up 79 points, or 0.57%, to 13,863. The S&P 500 (SNPINDEX: ^GSPC  ) is up 0.25% to 1,492.

There were four U.S. economic releases today.





Case-Shiller National Home Price Index




FHFA House Price Index




New-home sales




Consumer Confidence Index




Source: MarketWatch U.S. Economic Calendar.

First up, the Case-Shiller National Home Price Index rose a seasonally adjusted 2% in December, up from November's seasonally adjusted 1.2% growth. Year over year, the index was up 7.3% for 2012. That's the highest growth in nearly seven years, but overall the housing-price index is at roughly the same level as it was in 2009 and 2010.

The second economic release was from the Federal Housing Finance Agency, which reported that its home price index was up a seasonally adjusted 0.6% in December, up from November's 0.4% growth. Year over year, the FHFA home price index was up 5.5% for 2012.

Also in housing news, the U.S. Department of Commerce announced that new-home sales rose to a seasonally adjusted annualized 437,000 in January -- a four-year high. That's up from December's seasonally adjusted, annualized rate of 378,000 and above analyst expectations of 384,000. While the report is encouraging, it remains to be seen whether this is a new trend or just a blip on the radar. Analysts are speculating that the better-than-expected sales are a result of unseasonably warm weather throughout much of the country.

US New Single Family Houses Sold Chart

US New Single Family Houses Sold data by YCharts.

The fourth and final economic release came from the Conference Board, which said its Consumer Confidence Index rose to 69.6 in February. That's up from the low January level of 58.4 and above analyst expectations of 62.3. Consumer confidence had been growing in the fall of 2012 before talk of the fiscal cliff began, but it plummeted when the U.S. briefly went over the cliff. While the current debate over sequestration does not seem to be weighing so heavily on consumers' minds as the fiscal cliff, the Consumer Confidence Index is still lower than it would be otherwise.

Today's Dow leader
Today's Dow leader is Home Depot (NYSE: HD  ) , up 5.5%. That's no surprise, given the multiple positive housing reports, but the real reason Home Depot is up is the better-than-expected earnings report the company released yesterday after the market close. Home Depot reported earnings per share of $0.68, up 32% from last year and above analyst expectations of $0.64 per share. The company also reported fourth-quarter revenue of $18.25 billion, up 14% from last year and comfortably above analyst expectations of $17.7 billion. Bear in mind that due to an extra week in the current quarter compared with last year's fourth quarter, earnings per share were $0.07 better than in last year's Q4, while revenue was $1.2 billion higher.

If the Street-beating results weren't enough, Home Depot increased its quarterly dividend by 34% to $0.39 per share per quarter. This puts the forward yield at 2.3%. The company also announced a share buyback authorization of $17 billion through 2015.

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Related Tickers

9/30/2016 5:01 PM
^DJI $18308.15 Up +164.70 +0.91%
HD $128.68 Up +0.75 +0.59%
Home Depot CAPS Rating: ****
^GSPC $2168.27 Up +17.14 +0.80%
S&P 500 INDEX CAPS Rating: No stars