U.S. Stocks Tilt Higher, Led By Gains In Technology Shares
NEW YORK (MarketWatch) -- U.S. stocks on Wednesday shifted higher as technology shares rallied and the ailing financial sector drew a lift from billionaire Warren Buffett's deal to buy a $5 billion stake in investment bank Goldman Sachs Group.
Markets remained jittery as U.S. lawmakers capped a second day of testimony by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson on plans to pass a $700 billion plan to buy toxic assets.
"Buffett's investment in Goldman Sachs is a major step, but it depends on Congress to put away its political grandstanding and grant passage to the [bailout] plan," said Kevin Giddis, managing director, Morgan Keegan & Co.
The Dow Jones Industrial Average rose 17.60 points to 10,871.77, with 16 of its 30 components trading higher; gains were fronted by J.P. Morgan Chase & Co. , up 2.9%.
The Dow's declines were also fronted by one of its financial components, with Citigroup Inc. , down 4%.
The S&P 500 Index rose 4.06 points to 1,192.28, with energy, information technology and financials fronting sector gains. Industrials proved the index's only lagging sector late in the session.
The Nasdaq Composite climbed 18.56 points to 2,171.89.
Volume neared 573 million on the New York Stock Exchange while 414 million shares were exchanged on the Nasdaq. Decliners outpaced gainers by 8 to 7 on the NYSE and by 7 to 6 on the Nasdaq.
Beyond buying $5 billion in preferred stock, Buffett's Berkshire Hathaway Inc.
has warrants to acquire an additional $5 billion in common stock in Goldman , which also plans to raise as much as $5 billion via a public offering of its common stock. .
"Buffett's $5 billion injection into Goldman Sachs is being seen as a vote of confidence for the firm and the financial markets," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
Shares of Goldman rose 6.3%.
In testimony prepared for the Joint Economic Committee, Bernanke cast doubt on thinking in some quarters that the central bank might lower interest rates again soon. .
Shares of American International Group Inc. fell 14.7% after the insurer said it would take the $85 billion, two-year facility from the Fed after failing to find private-sector financing.
In a related development, the Federal Bureau of Investigation is investigating four big U.S. institutions whose collapses helped trigger the government's proposed bailout, according to media reports late Tuesday. .
In Wednesday data, the National Association of Realtors reported the resales of single-family homes and condos declined 2.2% in August to a seasonally adjusted annual rate of 4.91 million, less than the 4.93 million analysts had expected.
Oil futures reversed course on earlier gains, with crude for November delivery recently off 30 cents at $106.31 a barrel on the New York Mercantile Exchange.
Gold futures also fell, with the contract for December delivery down $1.8 to $893.2 an ounce. .
Overseas, the Nikkei 225 added 0.2% in Tokyo, while the FTSE 100 ended lower in London.
By Kate Gibson