NEW YORK - The S&P 500 and Nasdaq rose
slightly on Tuesday as deal news bolstered views that improved
merger activity could signal economic strength. But the Dow
edged lower after a downgrade of the tech sector.
Limiting gains was Morgan Stanley's downgrade of
semiconductors, which weighed on the sector.
Trading was choppy, with indexes swinging between gains
and losses.
The Dow Jones Transportation Average rose 5.3 percent as
Warren Buffett's Berkshire Hathaway agreed to buy Burlington
Northern Santa Fe Corp in a deal that values the railraod
company at $34 billion. Burlington shares jumped 27.5 percent
to $97.
Higher oil prices helped lift the S&P 500, with the S&P
energy sector index up 1.1 percent.
Technology stocks ranked among the major decliners after
Morgan Stanley downgraded the sector to "cautious" from
"attractive," and cut its view on Dow component Intel Corp,
saying inventories were beginning to creep up in the sector.
The PHLX semiconductor index lost 1.3 percent.
"One of the themes we've been pointing toward is that the
next catalyst after earnings is M&A activity, and we've had
some big ones," said Tim Smalls, head of U.S. stock trading at
brokerage firm Execution LLC in Greenwich, Connecticut.
"People consider companies to be cheap."
The Dow Jones industrial average slipped 17.53 points, or
0.18 percent, to end at 9,771.91. But the Standard & Poor's
500 Index added 2.53 points, or 0.24 percent, to finish at
1,045.41. The Nasdaq Composite Index advanced 8.12 points, or
0.40 percent, to close at 2,057.32.
In other deal news, Black & Decker Corp shares jumped 31
percent to $62, a day after Stanley Works Inc said it struck a
deal to buy the company. Stanley shares rose 10.1 percent to
$49.69.
U.S. oil futures shot up $1.47, or 1.88 percent, to settle
at $79.60 a barrel. ConocoPhillips' stock gained 1.5 percent
to $50.75.
Shares of Intel slid 2.7 percent to $18.50 on Nasdaq.
Burlington shares surged 27.5percent to $97.
Shares of Black & Decker jumped 23.9 percent to $58.66,
while shares of Stanley Works were up 4.8 percent at $47.30.
Data showed new orders received by U.S. factories rose
more than expected in September but had little impact on the
broader market.