The major averages were mixed in morning trading as the Dow was weighed down by a post-earnings slide in Home Depot (HD) but tech stocks' outperformance pushed the Nasdaq higher. The drag from both Home Depot and fellow retail disappointment Kohl's (KSS) is putting the S&P's five day winning streak in jeopardy, though the benchmark index is still in striking distance of closing the day in the green with about 4 hours left until the closing bell.
ECONOMIC EVENTS: In the U.S., housing starts rebounded 3.8% to a 1.314M unit pace in October. Building permits bounced 5.0% in October to a 1.461M unit rate.
COMPANY NEWS: Home Depot shares have slid 5% near midday after the home improvement retailer reported slightly better than expect earnings in the third quarter and backed its full-year profit outlook, but also posted lower than expected sales and trimmed its same-store sales growth guidance. Jefferies analyst Jonathan Matuszewski said he interprets Home Depot's lighter second half results as due more to the timing of returns on strategic investments that a softer macro environment, adding that the company's results this morning don't change his favorable view of the ongoing home improvement center share gains across most industry categories. He keeps a Buy rating on the stock, calling the pullback a buying opportunity for investors.
Kohl's shares have suffered even worse than Home Depot's, falling 17.5% after the department store operator reported worse than expected third quarter earnings and cut its profit view for the fiscal year.
In M&A news, Bloomberg's Ed Hammond, Nabila Ahmed and Dinesh Nair reported that Medicines Co. (MDCO) has attracted takeover interest from companies including Novartis (NVS), which has been holding talks about a potential acquisition. Following the report, Medicines Co. shares have risen 20%.
MAJOR MOVERS: Among the noteworthy gainers was Myovant Sciences (MYOV), which surged 116% after it said that the primary efficacy endpoint was met in its Phase 3 HERO study. Also higher was TJX (TJX), which gained 2% as the discount retailer reported better than expected quarterly results in a break from its high-profile peers.
Among the notable losers was Macy's (M), which fell 10% amid the reports from its rivals and after The Next Web reported that the company's website was hacked in October with malicious scripts in an attempt to steal customers' payment information. Also lower was Slack Technologies (WORK), which slid 8% after Microsoft (MSFT) said that its Teams communication app now has over 20M daily active users.
INDEXES: Near midday, the Dow was down 62.01, or 0.22%, to 27,974.21, the Nasdaq was up 23.19, or 0.27%, to 8,573.13, and the S&P 500 was virtually unchanged at 3,122.14.
