Stocks to Watch Before Thanksgiving

This week is an abbreviated week due to the Thanksgiving holiday. Equity markets will be closed on Thursday and will close at 1 p.m. EST on Friday. As such, I wouldn't expect much volatility in the three full sessions this week. (With that said, this is anything but an ordinary environment, so anything is possible.) The Dow Jones Industrial Average (INDEX: ^DJI) will be looking to snap a streak of four consecutive losses, and one closely watched Dow component, Hewlett-Packard (NYS: HPQ) , reporting its results on Tuesday.

This morning, home improvement retailer Lowe's (NYS: LOW) reported expectation-beating third-quarter results. The company said sales had risen 1.9% to $12.1 billion in the quarter ended Nov. 2. The increased revenue, owing partly to Sandy-related sales of storm-preparedness goods and rebuilding supplies, helped net income rise to $396 million, or $0.35 per share. The company's results have some macroeconomic significance, inasmuch as they may corroborate the "green shoots" that appear to be indicating the beginning of a recovery in the housing market. Lowe's is up 5.6% in premarket trading.

Recall that last Wednesday, Lowe's primary competitor, Home Depot (NYS: HD) , beat expectations on the top and the bottom line. In response, the market rewarded the shares with their highest closing value in 12 years!

Strictly speaking, Hewlett-Packard has beaten expectations at least four times consecutively prior to Tuesday's earnings report. However, the company has otherwise systematically crushed investors' hopes and dreams for some time now: The stock chart below tells a depressing tale. The market is looking for EPS of $1.14, a 2.5% decline with respect to the year-ago period, and achieving that would actually represent outperformance with respect to the S&P 500, which registered a 3.7% year-on-year decline in earnings in the third quarter.

HPQ Chart
HPQ Chart

HPQ data by YCharts.

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Alex Dumortier, CFA has no positions in the stocks mentioned above; you can follow him @longrunreturns. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend The Home Depot and Lowe's Companies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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