Strong Retail Sales May Save the Dow’s Winning Streak: The Home Depot, Inc. (HD), Verizon Communications Inc. (VZ), Hewlett-Packard Company (HPQ)

Some observers feared that higher payroll taxes in 2013 would hurt consumers, but new data released this morning should alleviate those worries. The Census Bureau posted retail sales numbers that rose 1.1%, beating economists’ expectations of 0.5% growth. While a good portion of the gain owes to higher gas prices, the report indicated that Americans are not cutting back on their homes or vehicles.

While consumer spending is on the rise, so too is the Dow Jones Industrial Average (INDEXDJX:.DJI) is today: As of 12:55 p.m. EDT the index is up 13 points, or 0.09%. Meanwhile, the S&P 500 (INDEXSP:.INX) and the NASDAQ are up 0.14% and 0.12%, respectively.

The Home Depot, Inc. (NYSE:HD)Today’s Dow downers
One surprising loser today is The Home Depot, Inc. (NYSE:HD). Shares are down 0.11% despite the overall positive retail sales numbers. The Census Bureau’s report indicated that Americans spent more money at the home improvement stores in February than in January and that sales in this segment have increased on a year-over-year basis.

Shares of The Home Depot, Inc. (NYSE:HD) are up more than 14% year to date and are currently just below their 52-week high. Today, it’s likely that investors are simply taking money off the table.

The Census Bureau also reported that electronics stores posted lower sales in February than in January. Among computer and software stores, sales figures aren’t available for February, but these stores performed worse in January than in previous months, on an adjusted basis. This may explain why shares of Hewlett-Packard Company (NYSE:HPQ) and software king Microsoft Corporation (NASDAQ:MSFT) are down slightly today.

Lastly, shares of Verizon Communications Inc. (NYSE:VZ) are down 0.4% today. The stock is closing in on its 52-week high, and today’s pullback may be the result of technical traders cutting their positions now that the stock has hit this threshold.

Long-term investors should stay on course and ride out this minor downturn, because greater things are likely on the horizon for shareholders. Recently, rumors have begun flying that Verizon Communications Inc. (NYSE:VZ) may be in talks to purchase the remaining 45% stake of Verizon Wireless from Vodafone. While this would load Verizon Communications Inc. (NYSE:VZ) with a massive amount of debt, it would also free the company to make strategic decisions that Vodafone might otherwise hinder or block. Additionally, some investors believe this would strengthen Verizon’s dividend over time.

The article Strong Retail Sales May Save the Dow’s Winning Streak originally appeared on Fool.com.

Check back Monday thru Friday as Matt explains what caused the Dow’s winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513. Fool contributor Matt Thalman owns shares of Microsoft. The Motley Fool recommends Home Depot. The Motley Fool owns shares of Microsoft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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