New York, NY, July 13, 2006--Shares of Home Depot Inc., fell to a 52-week low on Wednesday amid a broad sell-off on Wall Street and further pressured by a cautious note from Bear Stearns predicting slowing sales due to the cooling housing market.
Shares of Home Depot fell 72 cents, or 2.1 percent, to $33.66 on the New York Stock Exchange in late afternoon trading, after sliding as low as $33.60 earlier. The broader Standard & Poor's 500 was off 12.1 points at 1,260.51, while the Dow Jones Industrial Average, of which Home Depot is a member, fell nearly 106 points to 11,029. All but two stocks in the blue chip Dow were lower in afternoon trading.
In a note to clients, Bear Stearns cut its same-store sales estimates for Home Depot's current second quarter, fiscal 2006 and 2007.
Same-store sales, or sales in stores open at least one year, are a closely watched gauge of retail performance. Analysts see sales at Home Depot, the nation's biggest home improvement chain, as an indicator for overall retail spending.
"The changes reflect our expectation that wet weather in the East hurt recent trends, our view that the housing market is having a faster impact than originally anticipated, and that energy prices may be impacting demand," Bear Stearns wrote in the note.
However, Bear Stearns affirmed its earnings per share estimates, based on "exceptional" trends in Home Depot's supply business, which it said was "hitting on all cylinders," and its position as the industry's lowest-cost provider.
Other companies linked to the home improvement industry also fell in Wednesday trading on the Big Board. Shares of Home Depot rival Lowe's Cos. declined $1.10, or 3.9 percent, to $27.43 on the NYSE, while tool maker Black & Decker Corp. shed $1.88, or 2.4 percent, to $77.92.
