Buffett sparks optimism with latest purchase - New York Report

OPTIMISM over Warren Buffett’s latest deal and gains in commodity-related shares helped to buoy US stocks yesterday, giving the S&P 500 its biggest gain since May.

The Dow Jones industrial average rose 241.79 points, or 1.39 per cent, to 17,615.17, the S&P 500 gained 26.61 points, or 1.28 per cent, to 2,104.18 and the Nasdaq Composite added 58.25 points, or 1.16 per cent, to 5,101.80.

Copper rebounded from six-year lows while oil prices also rallied, helping push the S&P 500 energy index up 3.1 per cent and the materials index up 2.5 per cent.

Disappointing economic data in China boosted hopes for additional stimulus from Beijing, lifting Chinese stocks.

Buffett’s Berkshire Hathaway said it would buy Precision Castparts in a deal valuing the company at $32.3bn (£20.7bn) Precision Castparts’ shares jumped as much as 19.1 per cent to $230.92, while Berkshire Class B shares dipped 0.1 per cent to $143.42.

“We’ve had a whole lot of M&A throughout the year, and that’s positive because it means businesses are upbeat on the prospects for the economy,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Meanwhile, Twitter shares jumped 9.1 per cent to $29.50 after chief executive Jack Dorsey joined other insiders in buying more shares, and the company also clinched a multiyear partnership with the National Football League.