Home Improvement Boosts the Markets

The Standard & Poor's 500 stock average climbed to its highest point in almost five years today as investors cheered the performance of the Lowe's home improvement chain and shrugged off other, more negative, news about housing.

The S&P index, which is regarded by professionals as the best measure of the overall stock market, closed at 1,294.12, up 5 points. The S&P hasn't been this high since May of 2001.

The Dow Jones industrial average hit a new peak of 11,137.17 last Wednesday and then pulled back--as stocks so often do after breaking through to a new high. Today, the Dow regained 36 points, climbing back to 11,097.55

The Nasdaq Stock Market composite index--whose rebound has lagged the Dow and S&P--closed 20 points higher at 2,307.18.

Lowe's Cos. stock rose more than 5 percent after the No. 2 retailer in the home center business posted a 37 percent increase in fourth-quarter profits, its best showing in three years.

Lowe's delivered profits that were almost 10 percent better than analysts had predicted. Roughly two-thirds of the S&P 500 members have beaten their earnings targets, which is a key reason why the market has been doing so well.

Stock traders are in such a positive mood that today they put a positive spin on the new home sales report for January, which showed houses selling at the slowest rate in a year and a record backlog of unsold new homes waiting for buyers.

Clearly another sign the housing market is cooling off, the slowdown, however, did not deter stock buyers. They argued that the slowing housing market reduces inflationary pressure, which in turn reduces the need for the Federal Reserve to keep raising interest rates. That is what the stock market likes.

Stocks also benefited today from a decline in oil prices, which are retreating from a spike caused by last week's bombing attacks in Saudi Arabia.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.