Dow component Home Depot Inc. (NYSE: HD) announced today that 7,000 jobs, or roughly 2% of its workforce, will be eliminated as the company shutters its 34-store EXPO Home Design Centers business. The retail chain said that EXPO "has not performed well financially and is not expected to anytime soon. Even during the recent housing boom, it was not a strong business. It has weakened significantly as the demand for big ticket design and decor projects has declined in the current economic environment."

Two thousand of the job cuts will stem from back-office reductions and a 10% haircut to the officers' ranks. Additionally, HD says it's freezing the salaries of all corporate officers in an attempt to save cash. Also on the chopping block is capex; the retailer said that capital spending will be slashed to about $1 billion in the coming fiscal year.

The changes to HD's payroll will result in about $532 million in restructuring costs, with $390 million affecting the recently concluded fourth quarter. However, the company backed its fiscal-year forecast. Sales and earnings per share are expected to decline by 8% and 24%, respectively, excluding charges.

Happily for the housing-dependent retailer, investors today seem encouraged by its cost-cutting moves. HD shares opened on a gain of about 4%.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

President Obama is speaking as I type this post. He is making many promises, and I believe he will make every effort to see them through to the best of his ability.

Regardless of his successes and failures in the coming years, we now have the focus of Washington and Wall Street working on preventing us from slipping into a depression and guiding us out of a year-old recession. Main Street is also doing its share to correct past mistakes, and they are making the biggest sacrifices.

These sacrifices come in the form of lower wages, cutting back on spending, living on fewer resources than they may have had available to them only a short while ago. We go on this journey together and many conjecture that things will get worse before they get better. I think this is only partially true. Unemployment appears to be rising but most of our problems seems to be known to us even if not resolved.

Home Depot (NYSE: HD) is ending its 16-year old program that supported U.S. Olympians.

The Olympic Jobs Opportunities program provided part-time work, flexible hours and full-time benefits to 600 athletes who went on to win 145 medals. Spokeswoman Jean Neimi told (subscription required) The Wall Street Journal that "At this economic time, we are looking more closely at all our programs and marketing sponsorships. . . This is being done with some sadness."

The program cost the company about $15 million to $20 million over four years, but seems to have been a successful marketing tool, and the Olympians were featured prominently in Home Depot ads.

This seems like a budget cut that comes at the expense of some pretty bad publicity, and it suggests that Home Depot is doing even worse than most people are already anticipating.

Well, seems like Lowe's Companies, Ic. (NYSE: LOW) did much better than expected during the third quarter. And I was apparently too pessimistic in my earnings preview. The call was for $0.28 per share. The home-improvement retailer beat expectations by $0.05 per share, according to Thomson Reuters estimates. Hey, I tip my hat to management.

But I wouldn't buy the stock just now (unless, of course, you have a very long-term horizon, are willing to ride out the bear market, and intend on improving your cost basis through dollar-cost-averaging). My reasoning is simple: total sales increased only 1.4%, and same-store sales decreased nearly 6%. It's that bad drop in the comps that really has me worried. All retailers are suffering through lousy comps right now, and I think sales are destined to remain weak.

Yet, the market seems to be saying something else to me. Lowe's saw its shares rise over 4% on Monday, on good volume, and on a bad day for the major indexes, too. Is the market saying that all the bad news is priced in? You know, I understand the earnings game and how the market loves it when a business beats estimates, and certainly a $0.05 beat is cool, but I'm not sure that better prices are ahead for those who follow Lowe's and its stock. Consumers just won't be spending enough to justify the buying seen in Lowe's equity yesterday.

Amid an unprecedented decline in the housing market and a significant slowdown in consumer spending, Home Depot (NYSE: HD) is in the unenviable position of being a housing-dependent retailer. Not surprisingly, analysts are skeptical ahead of the company's second-quarter earnings report, which is slated to hit the Street next Tuesday, August 19, ahead of the opening bell.

According to Thomson Financial, analysts are expecting HD to report a profit of 61 cents per share for the recently concluded quarter. During the past year, the company's performance in the earnings spotlight has been mixed. First Call reports that Home Depot has exceeded earnings estimates in two of the past four quarters, and fallen short of the Street's mark in the other two reporting periods. Its second-quarter report a year ago was one of the upside surprises; HD beat expectations by five cents per share last August.

However, it doesn't look like brokerage firms are banking on another Street-beating quarter. There have been 3 downward revisions to HD's estimated annual earnings, compared to just 1 upward revision (per First Call). Meanwhile, the average 12-month price target on the shares is $29.53. This target is a premium of 8.6% to the stock's closing price Thursday, but it represents a discount of more than 23% to HD's current annual high. In other words, analysts' expectations for the stock are rather low.

Today was a volatile day in the markets as stocks started out flat to slightly positive early on, went negative, but then came back throughout the day. Traders had no real economic numbers, but oil trading under $115 and gold down another 3% has traders cheering beyond any lagging economic numbers.

Here are today's unofficial closing bell levels:
DJIA: 11,782.35
S&P500: 2,439.95
NASDAQ: 1,305.31
10YR T-Note 4.008% (+0.058%)
Pre-Market Analyst Upgrades
Pre-Market Analyst Downgrades

Amazon.com Inc. (NASDAQ: AMZN) rose sharply in today's final minutes. An analyst at Citigroup noted that the company could sell as many as 380,000 units of its Kindle e-book reader this year, which could in turn increase its Audible subscriptions and could raise its e-book sales. Shares were up over 9% at $87.86 in today's final minutes.

The Home Depot (NYSE: HD) shares are trying to find their way today as investors digest Federal Reserve Chair Ben Bernanke's testimony on the state of the economy before the Senate Banking Committee. Investors are worried that inflation and weakness in credit markets will continue to drag down the economy and were less than impressed by this morning's PPI numbers. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on HD.

After hitting a one-year high of $40.75 last July, the stock has hit a new one-year low today. This morning, HD opened at $21.39. So far today the stock has hit a low of $20.76 and a high of $21.69. As of 12:10, HD is trading at $21.47, down $0.06 (-0.3%). The chart for HD looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $27.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in four months as long as HD is below $27.50 at November expiration. Home Depot would have to rise by more than 26% before we would start to lose money. Learn more about this type of trade here.