Financial News

LONDON (ShareCast) - With stock markets in rapid retreat around the world, Wall Street saw no reason to buck the trend, despite a blockbuster deal by Berkshire Hathaway (NYSE: BRK-A - news) which its chairman, Warren Buffett, described as 'an all-in wager on the economic future of the United States'.

Buffett's investment vehicle has dug deep and splashed out $44bn in cash and shares on the Burlington Northern Santa Fe railway. Berkshire Hathaway, which already owns 22.6% of the business, is paying $100 a share for the rest of the firm. Today's acquisition, which includes $10bn of Burlington Northern debt, is the biggest in Berkshire's history, and more than twice as big as the second biggest acquisition the so-called 'Sage of Omaha' has ever made.

'Our country's future prosperity depends on its having an efficient and well-maintained rail system,' Buffett said.

Shares in Burlington chugged higher, taking sector peers CSX (NYSE: CSX - news) and Union Pacific (NYSE: UNP - news) with them.

In a separate move, Berkshire surprised the market with news of a 50-for-1 split of its Class B common stock.

In other M&A news, Stanley Works has agreed to buy rival DIY and power tools maker Black & Decker for $4.5bn. Both shares reacted positively to the news.

The major stock indices opened lower, though the scale of the losses was less than that seen in Europe. The Dow Jones industrial average is down 13 points at 9.776, while the broader based S&P 500 is half a point weaker at 1,042. The tech-heavy NASDAQ Composite (NASDAQ: news) slipped 3 points to 2,045 as computer chip makers fell out of favour.

Morgan Stanley (NYSE: MS - news) was the voice of gloom for semiconductor shares as it turned cautious on the sector, which it said is 'in the final innings of the semi[-conductor] cycle.' The broker downgraded CPU-maker Intel (NASDAQ: INTC - news) and memory chip maker Micron Technology (NYSE: MU - news) to 'equal weight' from 'overweight'. Graphics chip maker Nvidia and mobile phone chip maker Texas Instruments (NYSE: TXN - news) tumbled in sympathy.

On a brighter note for tech stocks, Cognizant Technology Solutions shot higher after the computer services provider announced a 21% year on year jump in third quarter net income and higher than expected sales.

Banking stocks took a knock from Swiss bank UBS (Virt-X: UBSN.VX - news) 's third quarter figures, which showed a loss of SFr.564m. Bank of America (NYSE: IKJ - news) led the US banks lower.

The Washington Post quotes people familiar with the matter as saying that Goldman Sachs (NYSE: GS - news) is proposing to buy millions of dollars in assets from struggling mortgage finance giant Fannie Mae (NYSE: FNM - news) .

The Federal Open Market Committee begins its two-day meeting today, with the Fed's policy statement due out Wednesday.

S&P 500 - Risers Burlingtn N Sante Fe (BNI) $97.64 +28.36% Black Decker Corp. (BDK) $58.55 +23.68% Cognizant Technology Solutions Corp. (CTSH) $41.55 +7.09% CSX Corp. (CSX) $45.75 +6.79% Norfolk So Corp. (NSC) $49.32 +5.77% Union Pacific Corp. (UNP) $58.19 +5.68% Stanley Works The (NYSE: SWK - news) (SWK) $47.35 +4.87%

S&P 500 - Fallers IntercontinentalExchange (ICE) $96.60 -6.06% Novellus Systems Inc. (NVLS) $19.65 -5.44% Sandisk Corp (NASDAQ: SNDK - news) . (SNDK) $19.81 -5.03% Kla-Tencor Corp. (KLAC) $31.23 -4.96% Expeditors International Of Washington Inc. (EXPD) $31.82 -4.84% Rockwell Collins Inc. (COL) $48.53 -4.43% Slm Corp (NYSE: ISM - news) . (SLM) $9.32 -4.41% Micron Technology (MU) $6.29 -4.41%

Dow Jones I.A - Risers Du Pont E I De Nemours and Co. (DD) $32.75 +1.49% Walt Disney Co. (DIS) $27.57 +0.58%

Dow Jones I.A - Fallers Intel Corp. (INTC) $18.50 -2.68% Alcoa Inc (NYSE: AA - news) . (AA) $12.18 -2.40% Bank Of America Corp. (BAC) $14.33 -2.05%

Nasdaq 100 (NASDAQ: news) - Risers J.B. Hunt Transport Services Inc. (JBHT) $31.11 +3.29% Vertex Pharmaceuticals Inc (NASDAQ: VRTX - news) . (VRTX) $36.79 +1.77% Research In Motion Ltd. (RIMM) $56.69 +1.70%

Nasdaq 100 - Fallers Kla-Tencor Corp. (KLAC) $31.23 -4.96% Expeditors International Of Washington Inc. (EXPD) $31.82 -4.84% Nvidia Corp. (NVDA) $11.67 -3.31%