U.S. markets traded slightly lower on Tuesday, despite a better-than-expected New Residential Construction Report, as investors remained cautious before the release of the latest minutes from the Federal Open Market Committee Wednesday afternoon.
In economic news, the Commerce Department reported that housing starts came in at 1.03 million, ahead of the 1.19 million the economists were expecting. The July increase in single-family units was 12%, the largest increase since 2007.
At the same time, permits (which provide some clue as to future building but are less important than starts) fell 16.3% to 1.1 million, and below market expectations.
The Dow Jones Industrial Average was off 0.1%, while the S&P 500 Index was down 0.2%. Weakest of all, the Nasdaq Composite slid 0.6%. Sectors were mostly lower, with financials the only sector even close to breaking even.
Retail earnings were mixed today, with an earnings miss by Wal-Mart Stores, Inc. (NYSE:WMT) leading WMT stock lower. However, Home Depot Inc (NYSE:HD) and TJX Companies Inc (NYSE:TJX) came through nicely for investors, while Omeros Corporation (NASDAQ:OMER) had good news of its own. Here are the stories behind the price jumps:
Home Depot (HD)
HD stock had a solid day, rising more than 2% after the home improvement retailer reported second-quarter earnings of $1.71 a share that met Wall Street’s expectations, but was 19 cents better than a year ago. Revenue of $24.8 billion was just slightly ahead of the estimates.
In addition, Home Depot raised guidance for its current-year earnings for the second time this year. Their new estimate is for $5.36, up from $5.27 last quarter. HD said it would also buy back some $4 billion in stock over the next six months.
All in all, a terrific day from one of the leading retailers on Wall Street.
TJX Companies Inc (TJX)
TJX, the parent company of T.K. Maxx and Marshalls stores, gapped up over 7% today after reporting second-quarter earnings of 80 cents a share on $7.36 billion, ahead of street estimates for 76 cents a share on $7.25 billion. Sales were up 6% this quarter, as more shoppers frequented TJX-owned stores.
TJX also raised its guidance to $3.24 to $3.28 a share for the rest of the fiscal year. Previous guidance was $3.21 to $3.27 a share. TJX stock has been moving higher lately, in a nice uptrend with increasing volume.
Omeros Corporation (OMER)
Omeros was the largest gaining stock on Wall Street today, surging 72% after the biopharmaceutical firm reported positive news on its phase 2 clinical trial of OMS721, a treatment for thrombotic microangiopathy. (TMA is a rare type of blood clots that can form in the brain or the kidneys and is life threatening.)
OMER stock touched $30 this morning, more than doubling Monday’s closing price, before pulling back to finish at $25.08. OMER stock had fallen from $26 in April, to a recent low near $12 before rebounding over the past two days. Today’s intraday action wiped out four months of losses, a good demonstration of the volatility of the small cap biotech sector.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
