The markets opened higher today, buoyed by a Home Depot announcement to repurchase close to $23 billion in company stock moving forward. An increase in share buybacks means fewer shares available to investors, which in turn boosts Home Depot Earnings Per Share (EPS), and sends share prices higher. The company plans to use the proceeds from the sale of its supply business (the unit was sold to several private equity companies, including Bain Capital) to fund the share repurchase. The announcement sent shares 6% higher in the morning trading session. With the the housing market on the rocks, and the prospects for its improvement unclear, this is probably a smart move - the company will likely pick up the shares at a price below intrinsic value, since investors still seem to be avoiding housing related stocks.
In addition, Morgan Stanley announced a 40% increase in Q2 earnings, driven by strong performance in its wealth management and institutional securities businesses. This translates into an EPS of $2.45 per share vs. analyst consensus of $2.01 per share. Shares in morning trading are up around 1.5% at $89.03.