MARKET SNAPSHOT: U.S. Stock Market Gets Upbeat Signal From
Buffett
By Kate Gibson
Warren Buffett's blockbuster deal for Burlington Northern Santa Fe should
offer a positive jolt to the broader U.S. stock market, which tends to follow
the lead of the transportation sector.
"Rails in particular but transportation in general tend to lead the market,"
said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
Buffett's Berkshire Hathaway Inc. (BRKA) on Tuesday said it would spend $44
billion to buy the railroad operator Burlington Northern (BNI). .
"The biggest statement in this elephant-size deal is he's betting on the
economy getting better. The last thing you want to buy is a railroad if you
think the economy isn't getting better," said Art Hogan, chief market strategist
at Jefferies & Co.
Word of the deal boosted the Dow Jones Transportation Average (DJT) lately up
4.4%, as well as the shares of Burlington Northern, up more than 28%, and other
railways. Shares of Union Pacific Corp. (UNP) were up 6.5%, while CSX Corp. (
CSX) advanced 6.3% and Norfolk Southern Corp. (NSC) gained 3.8%.
Yet worries about the financial sector weighed on the broader market, with the
Dow Jones Industrial Average (DJI) off 83.66 points at 9,705.78, and the S&P 500
Index (SPX) down 7.73 points at 1,035.15. The Nasdaq Composite Index (RIXF)
declined 15.59 points to 2,033.61.
(END) Dow Jones Newswires
11-03-091158ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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