US STOCKS-Dow edges higher as Home Depot puts focus on retail earnings

By Johann M Cherian and Sanchayaita Roy

Aug 19 (Reuters) - The blue-chip Dow was just shy of a record high on Tuesday as Home Depot shares gained after the retailer kept its annual forecasts intact, while the S&P 500 and the Nasdaq were subdued ahead of a Federal Reserve conference later in the week.

Home Depot HD.N rose 4.6% despite missing quarterly results estimates, while rival home-improvement chain Lowe's LOW.N gained 2.7% in early trading. Earnings from Lowe's and big-box retailers Walmart WMT.N and Target TGT.N later this week are now in focus as investors await more insight on the health of the American consumer.

Consumer spending accounts for around 70% of the total U.S. economy and traders are keen to know the impact U.S. tariffs have had on corporate forecasts and individual expenditure. Last week, data showed the levies dented consumer confidence in July.

On the policy front, remarks from Fed Vice Chair for Supervision Michelle Bowman are due later in the day.

Bowman, who is under consideration for the central bank's top job when Chair Jerome Powell's term ends next year, has voiced support for at least three interest rate cuts this year, in line with President Donald Trump's calls for lower borrowing costs.

Interest rate futures point to a total of two rate cuts this year worth 25 basis points each, with the first expected in September, according to data compiled by LSEG.

"People are a bit hesitant to spend right now with the level of interest rates and some of the uncertainty created by inflation," said Robert Pavlik, senior portfolio manager at Dakota Wealth.

"Until they get clarity, hopefully in the form of fewer tariff hikes and maybe some interest rate cuts, we're probably stuck in this bit of malaise."

At 09:58 a.m. ET, the Dow Jones Industrial Average .DJI rose 140.08 points, or 0.31%, to 45,051.90, the S&P 500 .SPX lost 3.55 points, or 0.05%, to 6,445.79 and the Nasdaq Composite .IXIC lost 88.99 points, or 0.41%, to 21,540.78.

Eight of the 11 S&P 500 sectors edged up. Real estate .SPLRCR led with a 1.2% rise, helped by better-than-expected housing data.

Technology stocks .SPLRCT pressured the S&P 500 and the Nasdaq the most, cooling from a nearly 15% rally this year.

Wall Street's main indexes have recovered since their April lows, when trade uncertainty stuck global markets, and have picked up steam following a better-than-expected earnings season and on the rate-cut expectations.

The key event this week is the Fed's annual symposium at Jackson Hole, Wyoming, from Aug. 21-23, where Powell's comments will be scrutinized for any clues on the central bank's outlook on the economy and monetary policy.

Intel INTC.O jumped 10% to hit its highest since March after the chipmaker got a $2 billion capital injection from Japan's SoftBank Group 9984.T.

Palo Alto Networks PANW.O surged 4.8% after the cybersecurity company forecast fiscal 2026 revenue and profit above estimates.

Medtronic MDT.N lost 4.3%. The company said it would add two new directors to its board after Elliott Investment Management took a large stake in the medical-device maker.

Advancing issues outnumbered decliners by a 1.71-to-1 ratio on the NYSE. Declining issues outnumbered advancers by a 1.03-to-1 ratio on the Nasdaq.

The S&P 500 posted five new 52-week highs and one new low while the Nasdaq Composite recorded 33 new highs and 24 new lows.