* Brokerage views boost Microsoft, Exxon Mobil
* Target, Home Depot spark caution about spending
* Dow up 0.3 pct; S&P 500 up 0.1 pct; Nasdaq up 0.3 pct
* For up-to-the-minute market news, click []
(Adds volume)
By Ellis Mnyandu
NEW YORK, Nov 17 (Reuters) - U.S. stocks rose to fresh
13-month highs on Tuesday as upbeat broker views on improving
prospects for two Dow components offset disappointing holiday
spending outlooks from Target and Home Depot.
Even so, the underlying tone was negative as investors
fretted about the strength of the recovery and the recent
rally, and more stocks fell than rose.
Weak outlooks for the key holiday season weighed on
investor psychology since consumer spending accounts for about
two-thirds of U.S. economic activity and is a key factor in
corporate profits.
"The news from retailers wasn't particularly good," said
Eric Kuby, chief investment officer at NorthStar Investment
Management Corp in Chicago. "It seems to me the major flavor
for today is once again, the market participants questioning
the strength of the recovery."
The Dow Jones industrial average <> rose 30.46 points,
or 0.29 percent, to close at 10,437.42. The Standard & Poor's
500 Index <.SPX> edged up 1.02 points, or 0.09 percent, to
1,110.32. The Nasdaq Composite Index <> added 5.93
points, or 0.27 percent, to 2,203.78.
The three major U.S. stock indexes initially started lower
and then spent the bulk of the session near breakeven until
the last half-hour of trading, when gains in the technology
and energy sectors helped spur some upward momentum.
In Nasdaq trading, shares of software maker Microsoft Corp
<MSFT.O> gained 2 percent to $30 -- an 18-month closing high
-- after Morgan Stanley raised its price target on the stock
and said it was upbeat on the prospects for Windows 7 and the
company's holiday season.
Shares of Exxon Mobil rose 0.8 percent to $75.03 after
Barclays raised its recommendation on the stock to
"overweight" from "equal-weight." Both Microsoft and Exxon are
components of the 30-stock Dow Jones industrial average.
But shares of Home Depot <HD.N> fell 2.4 percent to $26.99
after the leading U.S. home improvement chain gave a forecast
that suggested weaker results at the end of the year and
predicted no meaningful recovery until the second half of
2010. For details, see []
Target Corp <TGT.N>, the No. 2 U.S. discounter, forecast a
holiday quarterly profit that could fall short of Wall
Street's estimates, saying early November results showed tepid
consumer demand. []
The stock dropped 3 percent to $48.77, while the S&P
consumer discretionaries index <.GSPD> shed 0.7 percent. The
S&P retail index <.RLX> dropped 1.4 percent.
"The consumer is a bit restrained. We're still in a very
tough economy, with a 26-year high in unemployment and
consumer credit being reduced. So retailers have to work
really hard to get through this holiday season in a profitable
fashion," added Kuby at NorthStar.
Data showing that U.S. industrial output rose less than
expected in October was another headwind, overshadowing news
that the Producer Price Index, a gauge of wholesale inflation,
was tame last month.
With Tuesday's slim gain, the S&P 500 is up 64.1 percent
from its 12-year closing low of March 9.
Volume was anemic, with only about 972 million shares
changing hands on the New York Stock Exchange, sharply below
last year's estimated daily average of 1.49 billion. On the
Nasdaq, about 1.92 billion shares traded, below last year's
daily average of 2.28 billion.
On the NYSE, declining stocks outnumbered advancers by a
ratio of about 6 to 5. On the Nasdaq, about seven stocks fell
for every six that rose.
(Editing by Jan Paschal)
(Ellis.Mnyandu@thomsonreuters.com; +1 646 223 6085; Reuters
Messaging:ellis.mnyandu.reuters.com@reuters.net))
