S&P 500 at record on Best Buy earnings, CVS deal

Traders work on the floor of the New York Stock Exchange during the afternoon in New York City. (Photo: AFP/Andrew Burton/Getty Images)

NEW YORK: The S&P 500 rose to a new record on Thursday (May 21) following strong earnings from Best Buy and news that CVS Health would acquire senior pharmacy services company Omnicare for US$12.7 billion.

The S&P 500 gained 4.97 points (0.23 per cent) at 2,130.82, a little less than two points above Monday's record. The tech-rich Nasdaq Composite Index rose 19.05 (0.38 per cent) to 5,090.79, while the Dow Jones Industrial Average was essentially flat, adding a scant 0.34 at 18,285.74.

Electronics retailer Best Buy surged 3.9 per cent after reporting that first-quarter earnings translated into 37 cents per share, eight cents above analyst forecasts.

CVS said the purchase of Omnicare will enable it to boost prescription sales in assisted-living and long-term care facilities. The transaction comes on the heels of numerous deals in the pharma and health care industries. Omnicare rose 1.7 per cent, while CVS advanced 2.4 per cent.

Hewlett-Packard advanced 2.3 per cent after announcing it will sell a 51 per cent stake in its China-based server business for US$2.3 billion to Tsinghua Holdings, the investment arm of China's Tsinghua University. The two companies are creating a new company called H3C.

Apple rose 1.0 per cent after Morgan Stanley raised its estimates for iPhone and Apple watch sales. Amazon gained 1.8 per cent on news that Morgan Stanley raised its profit forecasts, citing improved efficiencies at the online retailer.

Salesforce, a cloud computing company, vaulted 3.9 per cent after reporting a profit of US$4.1 million in the first quarter, compared with loss of US$96.9 million a year ago.

Lumber Liquidators, which sells hardwood flooring, tumbled 16.5 per cent after it said chief executive Robert Lynch had resigned unexpectedly. The company has been under scrutiny following a March report by CBS television news show "60 Minutes" that said products contained dangerous levels of formaldehyde, a known carcinogen.

Bond prices rose. The yield on the 10-year US Treasury dropped to 2.19 per cent from 2.29 per cent Wednesday, while the 30-year fell to 2.99 per cent from 3.08 per cent. Bond prices and yields move inversely.