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US STOCKS-Wall St advances as Home Depot, JPMorgan buoy Dow
May 21, 2013 / 4:51 PM / 4 years ago

US STOCKS-Wall St advances as Home Depot, JPMorgan buoy Dow

* Home Depot raises outlook, shares hit record intraday high

* Goldman Sachs sees S&P 500 at 1,750 by year-end

* JPMorgan shares hit highest since February 2001

* Dow up 0.4 pct, S&P 500 up 0.2 pct, Nasdaq up 0.2 pct

By Leah Schnurr

NEW YORK, May 21 (Reuters) - U.S. stocks gained on Tuesday as a record intraday high for Home Depot helped lift the blue-chip Dow, but investors were cautious a day ahead of congressional testimony from Federal Reserve Chairman Ben Bernanke.

Shares of JPMorgan Chase & Co extended gains after a preliminary tally showed shareholders had rejected a proposed split of the rose of chairman and chief executive officer. The stock was up 2.1 percent at $53.38.

Goldman Sachs said in a note to clients dated May 20 that it sees the S&P 500 at 1,750 by the end of the year - up 5 percent from Monday’s close - and expects a 12-month rally to 1,825. The bank’s economists forecast above-trend growth in U.S. gross domestic product in 2014 - for the first time in six years.

Bernanke will testify before a congressional panel, the Joint Economic Committee, on Wednesday morning, while the minutes of the Fed’s latest policy-setting meeting will also be released later that day.

The U.S. economic calendar is thin this week and the market will continue to be vulnerable to profit taking, with the Dow industrials and the S&P 500 staying near record highs.

The major U.S. stock indexes are up about 17 percent for the year so far, and the Federal Reserve’s ultra-loose monetary policy has played a significant role in the rally. The Fed is buying $85 billion in bonds a month, and the market has begun to search for any sign of when the central bank will alter the amount of purchases or halt the program.

“Central banks have been flooding the world with liquidity, and one place that’s gone is into the stock markets,” said Brian Gendreau, market strategist at Cetera Financial Group, based in Los Angeles.

Still, a reduction or end of the current quantitative easing program wouldn’t necessarily mean the end of the rally, as a better economic outlook should offset the change to monetary policy, Gendreau said.

“The initial market reaction to any sign or announcement that the Fed is tapering would be negative, but I don’t know that three months later, it would make much difference,” he said.

The Dow Jones industrial average rose 53.63 points, or 0.35 percent, to 15,388.91. The Standard & Poor’s 500 Index gained 3.91 points, or 0.23 percent, to 1,670.20. The Nasdaq Composite Index added 6.04 points, or 0.17 percent, to 3,502.47

Earlier, the Dow climbed to an all-time intraday high at 15,401.17.

The housing market’s recovery helped Home Depot report higher quarterly sales and earnings, prompting the world’s largest home improvement chain to raise its sales outlook for the year. Home Depot was the Dow’s biggest percentage gainer - up 3 percent at $79.06 after hitting an intraday record high of $79.40.

The small- and mid-cap Russell 2000 continued to face technical resistance at the 1,000-point level, but the index hovered around its all-time closing high.

Apple Chief Executive Tim Cook was testifying before Congress after a U.S. Senate report on the company’s offshore tax structure said the iPhone maker has kept billions of dollars in profits in Irish subsidiaries to pay little or no taxes to any government. Apple shares slipped 0.1 percent to $442.35.

Saks shares jumped more than 8 percent after the retailer reported better-than-expected sales in the first quarter. Its shares shot up 8.3 percent to $13.30.

Medical device maker Medtronic Inc reported a better-than-expected quarterly profit, driven by strong international sales, and its shares rose 5.2 percent to $52.47 after hitting $53.83, the highest since September 2008.

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