Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The Dow Jones Industrial Average (^DJI +0.78%) is just below 16,000 after reaching its new high for the first time ever yesterday. The Dow is being buoyed by JPMorgan Chase (JPM +0.07%) and Home Deport (NYSE: HD), which are both up on positive news. As of 1:30 p.m. EST the Dow was relatively unchanged at 15,959. The S&P 500 (^GSPC +0.82%) was also relatively unchanged at 1,786.
Today's top Dow stock is Home Depot, which is up 1.27% ($1.02) to $80.71. Today, Home Depot reported third-quarter earnings of $0.96 per share, up 50% from last year and better than analyst expectations of $0.89 per share. The earnings beat was even better than the highest estimate from all analysts of $0.95 per share. Revenue came in at $19.5 billion, up 7.4% versus last year and better than analyst expectations of $19.2 billion. Furthermore, Home Depot raised same-store sales guidance for the year from 6% to 7% and full-year earnings per share guidance to $3.72. Home Depot will continue to do well if the housing market steadily improves. Investors need to decide if they are willing to pay 21 times this year's earnings for the retailer.
JPMorgan Chase is second for the Dow today, up 0.90% ($0.49) to $56.24. JPMorgan stock rose on rumors that the bank will finalize its settlement with the Department of Justice over the overstated quality of mortgages sold to investors including Fannie Mae and Freddie Mac. A settlement was tentatively agreed to in October but has taken a month to finalize. Investors' hate uncertainty, but in boom times like we are seeing today they are willing to overlook the bank's large losses and focus on its future earnings power.
While third for the Dow today, the company having the largest effect on the index is Goldman Sachs (NYSE: GS), which is up 0.68% ($1.313) to $166.81. The Dow is structured as a price-weighted index, so companies with higher stock prices have proportionally larger effects on the average. Goldman was also a top mover yesterday after rumors surfaced that the bank is in talks to sell its commodities warehouse business.
