Originally created 11/20/02

Stocks mixed, blue chips rise despite weak sales for Home Depot



NEW YORK -- Investors eager to resume buying lifted Wall Street out of the doldrums Tuesday, allowing stocks to shake off early losses and move higher.

Investors were initially concerned about disappointing sales and a weak fourth-quarter forecast from Home Depot, but decided to focus instead on what appears to be an improving outlook for business in general. Remarks from Federal Reserve Chairman Alan Greenspan also reassured traders.

"The market certainly has been resilient over the last two months," said Arthur Hogan, chief market analyst at Jefferies & Co.

In midafternoon trading, the Dow Jones industrial average was up 47.38, or 0.6 percent, at 8,533.95. The Dow has enjoyed six consecutive weekly gains.

The broader market, which has had five straight winning weeks, was narrowly mixed. The Nasdaq composite index, recovering from an earlier loss of 22, was down 5.49, or 0.4 percent, at 1,388.20. The Standard & Poor's 500 index rose 3.59, or 0.4 percent, to 903.95.

The market was attempting to build on weeks of rallies that were based largely on surprisingly strong third-quarter profits.

On Tuesday, stocks received some upward momentum from Greenspan, who told the Council on Foreign Relations that financial innovations have helped the United States and the world to absorb the loss of $8 trillion of wealth in the U.S. stock market.

Better-than-expected earnings also contributed to Tuesday's gains. Retailer Staples rose $2.27 to $18.50 after beating third-quarter earnings estimates by 3 cents a share.

And, Deere advanced $1.49 to $49.55 on fiscal fourth-quarter earnings that were 5 cents a share higher than forecasts.

But the market's advance was curtailed due to Dow industrial Home Depot, which dropped $3.48 to $25.12 after saying fourth-quarter earnings will miss analysts' expectations. While third-quarter profits match forecasts, the company said same-store sales - those at outlets open at least a year, considered the best gauge of a retailer's strength - declined by 2 percent.

Investors have been sensitive to bad news from retailers because consumer spending accounts for two-third of the economy.

"The one thing we have been convinced about is the strength of the consumer. When we have a marquee company like Home Depot giving slightly downward guidance, it gives us the fear that the U.S. consumer is running out of steam," Hogan said.

Technology was hurt by a downgrade of Microsoft, down 66 cents at $55.19, by brokerage house Raymond James.

In economic news, the Labor Department reported consumer prices increased by a modest 0.3 percent in October. The rise in the Consumer Price Index, the government's most closely watched barometer of inflation, matched analysts' expectations.

Advancing issues outnumbered decliners nearly 7 to 6 on the New York Stock Exchange. Trading volume was light at 843.54 million shares, but ahead of 800.08 million at the same point Monday.

The Russell 2000 index, which tracks smaller company stocks, was essentially flat, up just 0.06 at 382.64.

Overseas, Japan's Nikkei stock average finished Tuesday up 0.2 percent. In afternoon trading in Europe, France's CAC-40 lost 1 percent, Britain's FTSE 100 declined 0.5 percent and Germany's DAX index slipped 0.3 percent.

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