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Stocks to Watch Before Thanksgiving

By Alex Dumortier, CFA - Nov 19, 2012 at 9:18AM

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Results that matter for the market

This week is an abbreviated week due to the Thanksgiving holiday. Equity markets will be closed on Thursday and will close at 1 p.m. EST on Friday. As such, I wouldn't expect much volatility in the three full sessions this week. (With that said, this is anything but an ordinary environment, so anything is possible.) The Dow Jones Industrial Average ( ^DJI -0.17% ) will be looking to snap a streak of four consecutive losses, and one closely watched Dow component, Hewlett-Packard ( HPQ -0.24% ), reporting its results on Tuesday.

Monday
This morning, home improvement retailer Lowe's ( LOW -0.68% ) reported expectation-beating third-quarter results. The company said sales had risen 1.9% to $12.1 billion in the quarter ended Nov. 2. The increased revenue, owing partly to Sandy-related sales of storm-preparedness goods and rebuilding supplies, helped net income rise to $396 million, or $0.35 per share. The company's results have some macroeconomic significance, inasmuch as they may corroborate the "green shoots" that appear to be indicating the beginning of a recovery in the housing market. Lowe's is up 5.6% in premarket trading.

Recall that last Wednesday, Lowe's primary competitor, Home Depot ( HD 0.01% ) beat expectations on the top and the bottom line. In response, the market rewarded the shares with their highest closing value in 12 years!

Tuesday
Strictly speaking, Hewlett-Packard has beaten expectations at least four times consecutively prior to Tuesday's earnings report. However, the company has otherwise systematically crushed investors' hopes and dreams for some time now: The stock chart below tells a depressing tale. The market is looking for EPS of $1.14, a 2.5% decline with respect to the year-ago period, and achieving that would actually represent outperformance with respect to the S&P 500, which registered a 3.7% year-on-year decline in earnings in the third quarter.

HPQ Chart

HPQ data by YCharts.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$34,580.08 (-0.17%) $-59.71
The Home Depot, Inc. Stock Quote
The Home Depot, Inc.
HD
$407.81 (0.01%) $0.04
HP Inc. Stock Quote
HP Inc.
HPQ
$37.55 (-0.24%) $0.09
Lowe's Companies, Inc. Stock Quote
Lowe's Companies, Inc.
LOW
$248.69 (-0.68%) $-1.70

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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