Buffett's big bet: $34B on 2nd-largest railroad NEW YORK (AP) _ The biggest name in investing is making what he calls an "all-in wager" on the U.S. economy _ $34 billion to own a railroad that hauls everything from corn to cars across the country. The acquisition of Burlington Northern Santa Fe, the nation's second-largest railroad, would be the biggest ever for Warren Buffett's Berkshire Hathaway investment company. Berkshire Hathaway Inc. already owns a 22 percent stake in Burlington Northern and would buy up the rest under the deal, for a total value of $34 billion. It still needs approval from Burlington shareholders and antitrust regulators, both expected early next year. ___ Factory orders rise 0.9 percent in September WASHINGTON (AP) _ Orders to U.S. factories rebounded in September, helped by strength in autos, heavy machinery and military aircraft. The fifth increase in six months bolstered hopes that a revival in manufacturing will help support an overall economic recovery. The worry is that if consumer spending falters in coming months, orders will slump again. The Commerce Department said Tuesday that orders rose 0.9 percent in September, slightly better than the 0.8 percent gain economists had expected. Demand increased for both durable goods, and nondurable goods such as chemicals and energy products. ___ Auto sales show industry beginning to stabilize DETROIT (AP) _ After months of roller coaster-like sales, the auto industry offered signs of recovery from its yearlong slump on Tuesday, as most automakers reported higher levels of U.S. sales in October. GM, the largest U.S. automaker, reported its first monthly sales gain in almost two years, while Hyundai and Subaru were huge winners thanks for their popular models and fuel-efficient sedans. Other top automaker _ Toyota, Ford, Nissan _also posted higher sales. The mood was in contrast to a year ago, when consumers were frightened away from showrooms by the early effects of the financial meltdown, plunging stock markets and the credit freeze. ___ Rising commodities, dealmaking lift stocks NEW YORK (AP) _ Investors sidestepped some of their doubts about the economy and bought energy and industrial stocks as commodity prices rose. Stocks ended back-and-forth trading mostly higher Tuesday as a spike in the price of gold and corporate dealmaking extended an advance from Monday. The gains in commodity prices helped stocks pare early losses. The Dow Jones industrial average slipped 18 points, while broader indexes rose modestly. Investors took some cues from commodities including gold, which jumped to a new high after India's central bank bought $6.7 billion worth of the metal from the International Monetary Fund. ___ Britain puts more money in banks, imposes breakup LONDON (AP) _ The British government moved Tuesday to break up the country's two biggest retail banks, imposing a major shakeup on the financial sector as it exacts payback for last year's massive state bailout at the height of the financial crisis. The government also injected billions of pounds more of taxpayer funds into Royal Bank of Scotland PLC and Lloyds Group PLC, underscoring worries the banking sector is not out of trouble yet. The change effectively pump almost 40 billion pounds ($65 billion) more into the two banks and could result in the creation of as many as three new commercial banks. ___ Oil prices rise as Fed meets on interest rates Oil prices rose Tuesday as the Federal Reserve began a two-day policy meeting on interest rates. The U.S. government stepped in to bail out faltering banks and other giant businesses over the past year, which has helped send the dollar tumbling and the price of oil sharply higher. Since oil is largely bought and sold in dollars, investors holding stronger currencies can buy more crude for less and have done so in recent months, sending the price of benchmark crude above $80 near the end of October. The central bank isn't expected to take any action on interest rates, yet statements issued after such meetings can hint at the Fed's take on the state of the economy. ___ Madoff's longtime auditor pleads guilty to fraud NEW YORK (AP) _ Bernard Madoff's longtime auditor pleaded guilty to securities fraud charges Tuesday, saying he failed to do his job to verify the disgraced money manager's financial records but did not know Madoff was running history's biggest Ponzi scheme. David Friehling, 49, entered the plea in U.S. District Court in Manhattan, apologizing to the thousands of victims who lost billions of dollars while he audited Madoff's financial records between 1991 and 2008. The plea was part of a cooperation deal with prosecutors. Continued... |