Home Depot and SearsHoldings - two of the three largest US retailers - yesterday both issued gloomy earnings forecasts, reflecting the impact of the troubled US housing market.

Home Depot, the largest US home improvement chain, said it expected its 2007 earnings per share to fall 15 to 18 per cent to a range of $2.30 to $2.36 a share, down from $2.79 per share in its last fiscal year.