Caution Runs Rampant on Wall Street; Rising Commodity Prices Lift Stocks – November 3, 2009

Investors Turn Cautious

Stocks struggled to gain traction on Tuesday as investors turned cautious again. All three major indices were able to cut earlier losses, but the Dow Jones Industrial average remained in negative territory. Three stocks rose for every two that fell on the New York Stock Exchange. A variety of reports on corporate dealmaking failed to propel stocks into positive territory during morning trading. Investors did appear slightly enthusiastic about Warren Buffett’s decision to pay $100 a share for Burlington Northern Santa Fe. Commodities rose broadly and gold jumped to a new high after India’s central bank bought $6.7 billion worth of gold from the International Monetary Fund. Shares of energy, industrial and materials companies responded well to the news. Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.48 percent. U.S. light crude oil for December delivery rose cents $1.47 to settle at $79.60 a barrel on the New York Mercantile Exchange. The dollar gained versus the yen and the euro.

Heard on the Street

Is Warren Buffett calling a bottom? Buffett put together the biggest deal in his 44-year career in 10 days. Berkshire Hathaway (BRK.A) will acquire unowned stake of railroad in a cash-and-stock deal worth $44 billion. After a deal of this proportion, what’s next for the Oracle of Omaha?

Video — Buffett’s Big Bet on the Economy

Just How Big Is Buffett’s Burlington Northern Bet?

As expected, David Friehling, the former accountant to convicted Ponzi-scheme operator Bernard Madoff, pleaded guilty to fraud and other charges. Will he sing like a bird or will he stay silent like Bernie?

Nokia Siemens Networks plans to eliminate as many as 5,760 jobs in the second round of cuts since the joint venture between Nokia (NOK) and Siemens AG (SI) was created. The cuts are necessary due to lower sales, huge operating losses, and a falling market share.

Health-care giant Johnson & Johnson (JNJ) also announced plans to lay off as many as 8,200 employees worldwide as part of a plan to save up to $1.7 billion in 2011.

On the heels of three other positive economic reports, the government reported that orders placed with US factories rose in September for the fifth time in six months. The data helped reinforce the point that manufacturing will drive the economic recovery in the United States.

Mastercard Inc. (MA) recorded a third-quarter profit after it aggressively trimmed marketing expenses and raised fees to banks. The credit card network also saw an increase in the number of transactions it processed.

A month after the Cash for Clunkers program ended, auto sales started to take a dive. Many were expecting the trend to continue, but things shaped up much differently last month. Most major automakers reported a sharp rebound in October after a terrible September, but auto sales are still expected to be flat compared to last year.

The Secret Lives of Auto Executives

Other Juicy Tidbits

An insurance industry CEO explains why American health care costs so much.

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Free $$$ for entrepreneurs — These 6 businesses landed grants to launch and expand. Here’s how.

Are amateurs running your 401k? — At most companies, the folks who set fees, pick funds and oversee money managers aren’t required to have investment training or expertise.