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Market Update

Fed Powered Market Ascent Continues on Wall Street

Author: Nichole Harper
Last Update: 1:35 PM ET May 21 2015

1:35 PM – Market indexes powered ahead and further in the record zone after weekly jobless claims met expectations. Fed minutes also supported the view that rates are not likely to rise at least for another two months and increase is likely to be modest.

Market indexes on Wall Street headed higher and into record territory as more Americans sought jobless benefits last week, but the number of people looking for benefits is near historic low level.

Seasonally adjusted weekly jobless claims climbed 10,000 to 274,000 from the previous week’s unrevised claims of 264,000, Department of Labor said.

Market indexes opened higher after the latest Fed Minutes showed policy makers are not prepared to raise rates in June but are not willing to wait longer if the evidence of economic momentum builds up.

Fed policy makers remain confident that the economy is on the upswing despite the late start in the year largely because weather conditions and strike at ports on the West Coast.

But consumer spending, a brighter spot in the economy, has not benefited from the recent plunge in energy prices.

Markets powered ahead on the belief that any rate is likely to be small and not expected at least till late summer.

On Wall Street, Tollbooth Strategy Index gained 0.4% or 42.63 to 10,833.36.

S&P 500 index rose 0.3% or 7.01 to 2,132.84 and the Nasdaq Composite Index increased 0.4% or 21.95 to 5,093.61.

Crude oil in New York jumped $1.86 to $60.84 a barrel and gold fell $4.10 to $1,204.60 an ounce.

U.S. Movers

CVS Health Corp (CVS) climbed 3.1% or $3.11 to $104.38 after the prescription drugs retailer agreed to acquire pharmacy services provider Omnicare, Inc for $98 per share in cash or $12.7 billion, including about $2.3 billion in debt.

The transaction is expected to close by September.

Best Buy Co Inc (BBY) climbed 5.3% or $1.81 to $35.59 after the multi-channel retailer said total revenues in the first-quarter ending on May 2 fell 0.9% to $8.6 billion from a year ago period.

Comparable store sales in the quarter slid 0.6% while comparable online sales jumped 5.3%.

Net income in the quarter tumbled 72% to $129 million or 36 cents per diluted share compared to $461 million or $1.31 from the same quarter last year.

The electronic appliances retailer said domestic revenue in the quarter increased 1.4% to $7.9 billion and international revenue plunged 22.1% to $668 million.

European Markets

UK retail sales volume in April rose 1.2% from March but jumped 4.7% from a year ago month. Amount spent in the retail industry was unchanged at £27.8 billion.

Online sales soared 13.1% from a year ago month the UK National Statistics reported today.

In London trading, FTSE 100 index slipped 7.40 to 6,999.96 and in Frankfurt the DAX index fell 0.2% or 26.13 to 11,822.34.

In Paris, CAC 40 index slid 0.2% or 10.55 to 5,122.75.

National Grid Plc gained 0.6% to 909 pence after the U.K.-based electricity and gas transmission company reported revenues in the year ending in March jumped 2.6% to £15.2 billion from £14.8 billion in a year ago period.

Net profit in the year tumbled 18.5% from a year ago to £2 billion compared to £2.5 billion and diluted earnings per share dropped to 53.4 pence from 65.4 pence.

Royal Mail Plc slid 0.4% to 499.70 pence after the U.K.-based postal and delivery services provider said revenues in the year ending in March rose 1% to £9.33 billion from £9.36 billion in a year ago period.

Net profit in the year climbed 38.9% from a year ago to £428 million compared to £308 million and diluted earnings per share jumped to 42.8 pence from 30.8 pence.

The postal and delivery services provider reduced its net debt in the year by more than 50% to £275 million.

Asian Markets

Nikkei average in Japan jumped to a new 15-year high for second day in a row and banks, utilities and electronics makers led the gainers. Takata was in focus after the airbag maker faced parts shortages to deal with larger recall.

Stocks in Tokyo closed higher and the Nikkei index jumped up to a 15-year high for the second day in a row.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc