Home Depot, Lowe’s stock downgraded

Home Depot and Lowe’s stock prices slid Monday, after Credit Suisse analyst Gary Balter downgraded both stocks from “outperform” to “neutral.”

The stock prices declined the same day the markets reacted to the announcements Lehman Brothers would file for bankruptcy and Bank of America would purchase Merrill Lynch.

Balter downgraded the home improvement stocks because the prices “already reflect a stronger recovery and better near term margins than we believe they can achieve in 2009 or 2010 and we do not see the housing market returning to a state of equilibrium in 2009.”

Balter said a “plethora” of good news this summer — from lower oil prices to the bail-out of Fannie Mae and Freddie Mac — to more pessimistic economic news worldwide “have all helped the stocks rally from their mid-July bottoms.”

The stocks also had reacted “positively to commentary that the worst is behind us, which we believe is creating unreachable expectations,” he wrote.

Home Depot stock closed Monday at $28.50, down 1.04 percent, and Lowe’s stock declined 3.54 percent to $24.52.

In other Home Depot news, the retailer has reopened all but two of 53 stores in Houston, Beaumont and Galveston that had been closed before Hurricane Ike’s landfall.

After the storm hit, the company sent 300 trucks to Texas, loaded with generators, gas cans, plywood, water, flashlights, batteries and cleaning supplies to replenish 500 truckloads sent before the storm.

The Home Depot Foundation also donated $1 million to the recovery efforts post-Ike. The funding will be split by three programs: $200,000 for the American Red Cross; $100,000 in clean-up materials for locally organized, community volunteer efforts, including Team Depot, the company’s associate volunteer program; and $700,000 to the Local Initiatives Support Corporation, a New York-based group that helps “resident-led” organizations.