Home improvement chain Lowe's Cos. (NYSE: LOW) is moving sharply higher in today's premarket following the release of strong second quarter earnings. Boosted by higher revenues, the North Carolina company reported a 9% jump in quarterly profits.

The company earnings of 67 cents per share, a nice upside surprise from the 61 cents analysts had expected. This was all the bulls needed to push the stock higher. So far this morning, shares of Lowe's are up 6.1%, looking to open up $1.63.

Not surprisingly, the company did have one weakness, and that was sales from stores open a year or more, which was directly related to the slowdown in the housing market. Analysts had factored that in already, and the actual decline was "only" 2.6%.

In what many will characterize as a reflection of the obvious, Federal Reserve Chairman Ben Bernanke indicated that "tighter" lending standards for mortgages will result in housing demand being restrained for a longer period than some had hoped.

Although it remained clear that more strict lending requirements were needed as more and more mortgage companies were going belly-up based on the over extension of homeowners, the time period when this would level off is now going to last a bit longer.

Oh well. Was a lesson learned from the fly-by-night lenders who are now washing their hands of bad loans and defaults and getting back to measurable basics of standard lending practices? Who knows, but Bernanke did indicate that the housing slump in progress has not spilled over into other parts of the economy. The housing economy will maintain a "moderate" amount of growth, according to Bernanke, who stated that "the slowdown in residential construction now appears likely to remain a drag on economic growth for somewhat longer than previously expected."

Is economic growth going to slow to a turtle's pace just based on how the housing market is doing? There is a big correlative effect there and there are larger risks as well like inflation that could drag down forecasts for economic growth in the U.S. this year.

It's not really good news that home building has seen six quarters of slowing growth (slowest since 1991), so maybe those "irrationally exuberant" lenders have indeed learned what not to do to drum up temporary business that could end up crashing all around them and the country.

Home Depot Inc. (NYSE: HD) reported its first quarter numbers this morning, and as expected the company put up disappointing numbers. When I ran a preview of this quarter's announcement last week, I discussed that the housing slowdown was affecting home builder suppliers, and this morning we get a clearer look at just how bad things have gotten for Home Depot.

Analysts had been expecting to see the company post 59 cents per share for the most recent quarter, but the company was only able to post 53 cents, and early morning traders are punishing the stock in the pre-market. With a couple hours to go before the opening bell traders have already pushed the stock down 4% in early morning action.

There are a couple of different woes that are weighing on Home Depot. First, and most notably, is the lackluster housing market. This weakness has been going on for a while now, and as home builders slow down production, suppliers such as Home Depot are going to be the ones that really feel the crunch, and that is what we are seeing now. Earnings this past quarter fell by roughly 30% year over year. That's a pretty hefty number which took earnings from $1.5 billion last year to only $1 billion during its second fiscal quarter this year.