U.S. Stocks Struggle, Berkshire Expands Investments by $23.5 B

Bikram Pandey
07 Nov, 2011
New York City

U.S. stocks struggled on the first of the week as the euro zone turmoil continued and focus shifted to Italy. Bond yields on Italian bonds rose as political uncertainty increased ahead of the parliament vote tomorrow. Berkshire Hathaway expanded the most in 15 years. Gold soared 2.4%.

[R]4:55 PM New York – U.S. stocks struggled on the first of the week as the euro zone turmoil continued and focus shifted to Italy. Bond yields on Italian bonds rose as political uncertainty increased ahead of the parliament vote tomorrow. Berkshire Hathaway expanded the most in 15 years. Gold soared 2.4%.[/R]

U.S. stocks wavered in the early trading after investors focused on the political developments in Europe. As leaders of Greece work to set up a national unity party by tomorrow, the focus of investors already turned to Italy.

Italian Prime Minister Silvio Berlusconi is facing a tough vote in the parliament tomorrow and more lawmakers are voicing displeasure with his leadership. Italian bonds yields rose to a new high of 6.7% and most economists estimate the country cannot afford interest rate more than 7%.

U.S. domestic earnings lifted select stocks in the morning. CME lowered margin requirements for the transfer of MF Global accounts. Jeffries said it lowered its European sovereign bonds holdings by half.

Separately, Berkshire Hathaway Inc in a regulatory filing said it invested $23.9 billion in the third quarter, the most in 15 years. The conglomerate added $7 billion in equities in the quarter compared to $3.62 billion in the second quarter.

In U.S. earnings, Cameco third quarter net declined 60% to $39 million. Dish Network third quarter net soared 30.3% to $319 million. EchoStar reported third quarter net loss of $19 million. Sysco first quarter net rose 1.2% to $302.6 million.

European market indexes declined as focus shifted to Italy and bank stocks. Greek banks suffer the worst deposit withdrawals in the last two months as political wrangling sap the economy. German industrial production fell at the fastest pace in September.

Tokyo stocks edged lower in weak trading as more companies lower earnings hit by Thai floods. Nikon, Furukawa and Asahi Glass cut down full-year outlook. Tokyo Stock Exchange is nearing a deal to acquire a majority stake in Osaka Securities Exchange.

Australian stocks edged lower after a leading jobs market indicator showed a weakness in new employment ads. Orica, the explosive maker gained after it reported 4% increase in annual earnings. Computershare surged after it won the U.S. regulatory approval.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond closed down to 2.01% and 30-year bond decreased to 3.06%.

The U.S. dollar fell 0.1% at $1.377 to one euro and closed higher against the Japanese yen to 78.06.

Immediate delivery futures of Texas crude oil increased $1.75 to $96.01 a barrel and futures of natural gas decreased 8 cent to $3.70 per mbtu and gasoline prices increased 7.3 cents to 273.70 cents a gallon.

In metals trading, copper increased 1.33 cents to $3.57 per pound, gold increased $41.40 to $1,797.50 per ounce and silver increased $0.86 to $34.94.