US stocks closed a choppy session mixed overnight, after Morgan Stanley downgraded the semiconductor sector, however losses were limited after some deal news boosted optimism that merger activity is picking up. Investors also remained cautious ahead of the Fed’s decision on rates. Major automakers also reported some better than expected sales results for October.
On Tuesday the Dow Jones fell 18 points to 9,772. The S&P500 Index rose 3 points to 1,045 and the NASDAQ closed 8 points higher to 2,057.
In economic news: Factory orders increased 0.9% in September after dropping 0.8% in August. Economists expected a rise of 0.8%.
And the US central bank’s two day policy meeting began on Tuesday, the Fed is expected to keep the fed funds rate at near zero with the bank not expected to lift interest rates until sometime next year.
In company news: Shares in Berkshire Hathaway Inc (NYSE:BRK.A) gained 1.72 per cent to $100,450.00 and shares in freight rail transportation company Burlington Northern Santa Fe Corp (NYSE:BNI) rose 27.51 per cent to $97. Warren Buffett’s Berkshire Hathaway is to purchase Burlington Northern Santa Fe Corp in a deal that values the target at around $34 billion.
In more merger news shares in supplier of tools and engineered solutions Stanley Works (NYSE:SWK) added 10.06 per cent to $49.69 and shares in power tools manufacturer Black & Decker Corp (NYSE:BDK) advanced 30.97 per cent to $62. Stanley Works says it will acquire Black & Decker in a $4.5 billion all-stock deal.
Shares in MasterCard Inc (NYSE:MA) fell 1.55 per cent to $219.20. The global payment solutions company posted better than expected earnings results for the quarter and revenue that also came in above expectations. The credit card processor says that revenue growth for fiscal 2009, 2010 and 2011 is likely to be below forecasts of 12-15 per cent.
Shares in healthcare products manufacturer Johnson & Johnson (NYSE:JNJ) dropped 0.94 per cent to $58.93. The company announced plans to slash its workforce by 7 per cent in an effort to cut costs, a move that could save the company up to $1.7 billion by 2011.
Looking at the NASDAQ Top 100: Cognizant Technology Solutions was the best performer, shares gaining 8.17% to $41.97, followed by Research in Motion and J.B. Hunt Transport Services. The biggest drag on the NASDAQ was KLA Tencor, shares falling 3.41% to $31.74. Applied Materials and Expeditors also finished lower.
