Home Depot Falls on Share-Buyback Plan

Elena
04 Sep, 2007
New York City

Merrill Lynch slashed its earnings estimates on 12 service stocks, as it predicts a 65% U.S. recession. As a result, FTI Consulting dropped 2.5%, Heidrick & Struggles slipped 5.9%, and Manpower declined 3%. Merrill Lynch also upgraded Iron Mountain to buy from neutral, sending it up 1.4%.

[R]09:45AM Wall Street opened mixed ahead of economic data.[/R]

Wall Street opened mixed, waiting indications from economic data whether the Fed Reserve will reduce interest rates at the FOMC meeting in two weeks. Some investors believe that it will cut its key rate to ensure economic growth, as the tight access to credit has made it harder for consumers and businesses to borrow.

The tech-heavy Nasdaq was supported by merger-and acquisition news, as discount wireless phone service provider MetroPCS Communications offered to buy rival Leap Wireless International for about $5.12 billion in stock. Leap Wireless ((LEAP)) surged 14%.

Yahoo ((YHOO)) also provided a boost, benefiting from a positive analyst comment. Its stock jumped 4.6% after Bear Stearns named the company''s stock as a top pick. Apple ((APPL)) shares rose about 3%. Advanced Micro Devices ((AMD)) was another notable gainer in the tech sector after Credit Suisse upgraded its stock to neutral from underperform, sending it up 1.8%. Intel ((INTC)) rose 1.2% after Bank of America Securities increased its price target to $31 from $29.

At the same time, the blue-chip average along with retail shares were weighed down by Home Depot ((HD)) which dropped 3.4% after it said it would buy back about 289.6 million shares at $37 each. General Motors ((GM)) advanced 0.9% ahead of monthly sales release by automakers. Analysts expect that August sales in the U.S. will hit a ten-year low.

Merrill Lynch slashed its earnings estimates on 12 service stocks, as it predicts a 65% U.S. recession. As a result, FTI Consulting ((FCN)) dropped 2.5%, Heidrick & Struggles ((HSII)) slipped 5.9%, and Manpower ((MAN)) declined 3%. Merrill Lynch also upgraded Iron Mountain ((IRM)) to buy from neutral, sending it up 1.4%.

In early trading, the Dow Jones industrial average fell 20.65, or 0.15%, to 13,337.09. The Standard & Poor''s 500 index was down 0.21, or 0.01%, at 1,473.78, and the Nasdaq composite index was up 6.08, or 0.23%, at 2,602.44. Bonds were little changed. The yield on the 10-year Treasury note was at 4.53%, the same as late Friday.


[R]09:00AM U.S. stock futures indicated a lower opening ahead of economic data.[/R]

U.S. stock futures were pointing slightly lower on Tuesday after the long-weekend holiday, with investors awaiting economic reports including data on monthly auto sales. Automakers are expected to release the weakest sales in August since a strike at General Motors about ten years ago.

The Institute of Supply Management is also due to release its manufacturing survey, which is expected to be above the 50% level that indicates economic growth. Merrill Lynch slashed its earnings estimates on 12 stocks, due to a potential possibility of a 65% U.S. recession.

The broker cut its rating on FTI Consulting ((FCN)) to sell from neutral, Heidrick & Struggles ((HSII)) to sell from buy, Korn Ferry ((KFI)) to neutral from sell and Manpower ((MAN)) to neutral from buy. Merrill Lynch also upgraded Iron Mountain ((IRM)) to buy from neutral.

Among other stocks driven by analyst comments, Intel ((INTC)) edged up 0.4% after Banc of America Securities lifted its price target to $31 from $29, boosted by a strong demand for notebook computers. S&P 500 futures fell 3.6 points at 1,473.10 and Nasdaq 100 futures declined 3.75 points at 1,991.00. Dow industrial futures fell 17 points.