DAVE HARRIS: Welcome to Dave On Stocks podcast #58. It's Tuesday May 15^th 2007. I'm Dave Harris. I'm a long term investor with a perspective on the market with individual stock advice.

We had a mixed bag of economic news with a discouraging housing report, but positive CPI data. The National Association of Homebuilders released a lower housing index suggesting further weakness ahead. That should come as no surprise in my view. On the bright side, consumer inflation in April rose only .4% which was below market views of .5%. That's down from the previous month's reading of .6%. The core CPI figure, which excludes food and energy, went up .2%. A month earlier it rose by .1%. I think this is what the market likes to see and it means the Fed is not going to raise rates any time soon to fight inflation. In fact, they may even cut and this data underscores that possibility. Stocks have shown tremendous strength lately and I think one contributing factor is the recent mergers and acquisitions activity sparking enthusiasm. Corporate earnings have been generally good, but for today there's some weak news on the earnings front.

First quarter results for retailer Wal-Mart (WMT) were a bit disappointing. The company was unhappy with the quarter too. Earnings rose by only 8% in the quarter. Revenue increased to $86.41 billion from $79.67 billion last year. That revenue rise was below expectations as Wal-Mart had trouble with home goods and apparel. The company issued a weaker second quarter forecast with earnings between .75 - .79 cents per share and same store sales up by only 2%. On the bright side, international sales and the Sam's Club divisions did well. I would hold the stock and expect sales to improve for back to school. Wal-Mart closed down by .22 cents to $47.62.

Home Depot (HD) the home improvement store said the first quarter profit fell by over 29%. The company's chief exec Frank Blake expects the home improvement market to remain soft this year. It was a terrible quarter and I suggest you sell the stock. It closed .71 cents lower today to 38.30.

Apple (AAPL) iTunes customers can pre-order the new Paul McCartney album today. "Memory Almost Full", set for release June 5^th, is McCartney's first album distributed digitally on the online music store. When pre-ordering, you get the "Dance Tonight" music video and the "Ever Present Past" single. Later this month, all of McCartney's 25 solo releases will be available on iTunes. Apple's stock fell 1.84 to 107.52.

3M (MMM) the diversified maker of Scotch tape and Post-It Notes, launched the world's first truly clear credit card. The company designed a material to render the cards truly transparent, with image and design capabilities becoming more popular with consumers. I think the stock is still cheap at $86.17 per share.

The DOW closed at another record high up 37.06 to 13,383.84. The NASDAQ fell 21.15 to 2,525.29. The S&P 500 shaved off 1.96 to finish at 1,501.19.

That's all for today's podcast. I'm Dave Harris. Remember to email me with any suggestions or comments at the "contact us" link on this page. My website is www.daveonstocks.com. This is Dave On Stocks.