Dow Moves Higher on Fed Remarks, Home Depot Earnings

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) cranked higher again today, buoyed by the Federal Reserve's comments on its stimulus program and from a strong earnings report by Home Depot (NYSE: HD  ) . The blue chips finished up 0.3%, or 52 points.

Regarding the Fed, investors were warmed by remarks from New York Fed President William Dudley, who said that he wasn't sure whether the Fed would dial down or increase its $85 billion bond-buying program in the coming months due to economic uncertainty. The comments seem to fly against recent murmurs from a number of Fed members that the time to scale back the quantitative was fast approaching. Earlier in the day, James Bullard, the Fed president in St. Louis, said the European Central Bank would do well to follow the Fed's lead and implement a similar stimulus program. The Fed will remain in the spotlight tomorrow as Ben Bernanke speaks before and Congress's Joint Economic Committee, and in the afternoon, the minutes from its latest policy meeting will be released.

Home Depot shares finished the day 2.5% higher, continuing its steady climb, as the housing recovery boosted first-quarter profits. The home-improvement retailer turned in a per-share profit of $0.83 against expectations of $0.76. Revenues, meanwhile, increased 7% to $19.1 billion, beating estimates of $18.6 billion. Online sales helped drive growth, along with the improving housing market and a new program allowing shoppers to purchase products over the Internet and having them shipped to a local store has been more popular than expected. The retail chain also bumped up its guidance, now calling for EPS of $3.52, better than the previous projection of $3.37. It expects revenue to grow 2.8%.

Elsewhere on the Dow, Merck (NYSE: MRK  ) shares soared, climbing 4.7% during the day and another 1% after hours. After the trading session, the pharma giant announced a $5 billion accelerated share repurchase program, part of a previously declared $15 billion buyback plan. The driving force behind its gain during the open session was less clear, though investors may be anticipating a positive result from a review on its new sleep aid drug from a panel of outside experts.

Finally, JPMorgan Chase (NYSE: JPM  ) ended up 1.4% after CEO/Chairman Jamie Dimon survived a vote to split his leadership roles at the bank's annual shareholder meeting. The issue had pushed the stock back and forth over the past few weeks as proxy firms had lined up to oust Dimon from the chairmanship, but the bank along with other commentators pushed to keep Dimon in both roles over the past few days. Only 32.2% of shareholders voted for the proposal to split the roles, less than the 40.1% that did so a year ago.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access!


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