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US STOCKS-Wall Street advances as Home Depot, JPMorgan buoy Dow
May 21, 2013 / 6:11 PM / in 5 years

US STOCKS-Wall Street 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 0.3 pct, Nasdaq up 0.3 pct

By Leah Schnurr

NEW YORK, May 21 (Reuters) - U.S. stocks gained on Tuesday after Home Depot raised its profit outlook, while JPMorgan rose after its chief executive won a vote of confidence from shareholders.

Shares of the two companies helped lift the blue-chip Dow as the broader market picked up steam in the early afternoon, sending indexes to fresh intraday records.

Comments from a top Federal Reserve official also boosted the market as they eased some concerns that the central bank could start to reduce its stimulus program, known as quantitative easing, or QE.

“It looks like with regard to QE, they’re considering a slower exit rather than a faster exit,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

“That brought some buying into the market this afternoon.”

After a 17 percent rally for major indexes since the start of the year, investors are trying to gauge how much further equities can run. 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.

The Dow Jones industrial average gained 68.09 points, or 0.44 percent, to 15,403.37. The Standard & Poor’s 500 Index rose 5.44 points, or 0.33 percent, to 1,671.73. The Nasdaq Composite Index added 9.83 points, or 0.28 percent, to 3,506.26.

The Dow climbed to an all-time intraday high at 15,418.53, while the S&P hit 1,674.17.

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.

JPMorgan Chase & Co shareholders voted to allow Jamie Dimon to keep his chairman title, sending the bank’s shares up 1.7 percent at $53.20.

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 3.2 percent at $79.21 after hitting an intraday record high of $79.40.

New York Fed President William Dudley said he cannot be sure whether policymakers will next reduce or increase the amount of purchases, due to the “uncertain” economic outlook.

The Fed’s current $85 billion per month bond buying program has played a significant role in the market rally and investors have become nervous over when the central bank will alter or halt the program.

Investors will be parsing testimony by Fed Chairman Ben Bernanke 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.

“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.

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 were up 0.1 percent to $443.25.

Saks shares jumped more than 8 percent after the retailer reported better-than-expected sales in the first quarter. Its shares shot up 8 percent to $13.26.

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