US Stocks Rise, Buffet Makes Huge Investment in Bank of America
Thursday, 25 August 2011

U.S. stocks rose, driving the Standard & Poor’s 500 Index up a fourth straight day, after Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) agreed to invest $5 billion in Bank of America Corp. (BAC)

The S&P 500 climbed 0.6 percent to 1,184.63 at 9:31 a.m. in New York. The Nasdaq-100 Index fell 0.1 percent, trimming a 1.2 percent drop in futures on the measure driven by Steve Jobs resigning as chief executive officer of Apple Inc. (AAPL), the world’s second-largest company by market value.

Bank of America shares rose 21 percent to $8.49. The company plunged 53 percent this year through yesterday amid concern the lender will need to raise capital. Berkshire agreed to buy 50,000 shares of cumulative perpetual preferred stock that pays an annual dividend of 6 percent.

“It’s a vote of confidence,” Kevin Caron, market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., said in a telephone interview. His firm has more than $115 billion in client assets. “Buffett has a fundamentally optimistic point of view about the economy.”

 

  

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