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STOCKS ADVANCE ON BARGAIN HUNTING

Better-than-expected earnings from Home Depot soothed Wall Street today as investors cautiously picked up bargains following Monday's sharp decline.

At 1 p.m., the Dow Jones industrial average was up 16.95 at 8,510.34, after dropping 185 points in the previous session.

The Nasdaq composite index rose 3.45 to 1,496.22 and the Standard & Poor's 500 index increased 1.72 to 922.49.

Dow component Home Depot climbed $3.05, to $31.12 after the nation's largest home improvement chain reported quarterly profits that beat Wall Street's expectations by 2 cents; it also posted same-store sales that were higher than estimates.

Lowe's lost 93 cents to $39.37, adding to yesterday's 9 percent drop.

Investors have cashed in profits in recent days on fears of a tepid economic recovery and concerns that a weak dollar will limit foreign investment. Analysts say stocks will likely trade in a range until they see clear evidence of economic improvement.

Hewlett-Packard rose 35 cents to $17.23 in advance of the technology's company's release of its quarterly earnings report after the close of markets today.

Nordstrom jumped $1.31 to $17.17. The chain of upscale department stores predicted second-quarter profit of 35 cents to 40 cents a share. The company was expected to earn 35 cents, the average estimate of analysts surveyed by Thomson Financial.

Drugmakers slumped for a second day after the U.S. Supreme Court ruled in favor of a plan in Maine that would force the companies to give discounts to the uninsured.

Pfizer, the world's biggest drugmaker, slid 80 cents to $31. Merck, the No. 2 U.S. drugmaker, lost $1.40 to $55.25. Bristol-Myers Squibb, the biggest maker of AIDS drugs, dropped 72 cents to $23.73. The S&P 500 Pharmaceutical Index has declined 6.2 percent in the past two days.

Inspire Pharmaceuticals sank $2.20 to $13.95. The company said its allergy compound failed to significantly reduce symptoms in a clinical study. Shares of the drugmaker had risen 73 percent this year.

Staples dropped 43 cents to $19.31 after the No. 1 office supply chain reported a drop in first-quarter earnings.

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