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While you were sleeping: GE stock climbs on bets of Buffett play

Wednesday 28th March 2018

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Wall Street climbed, spurred on by a rally in General Electric shares amid speculation US billionaire Warren Buffett might buy a stake in the company. 

Optimism that talks between the US and China might avert a global trade war also underpinned the mood, at least for now. 

“There’s going to be continued volatility in the short term and a lot of it will depend on how the fundamental news flow comes out,” Lisa Erickson, head of traditional investments at US Bank Wealth Management in Helena, Montana, told Reuters.

“Right now the biggest driver in the market seems to be around the trade news and it is looking more and more like some of these tariff discussions are negotiations rather than strong protectionist measures,” Erickson noted. 

In 1.23pm trading in New York, the Dow Jones Industrial Average rose 0.7 percent. However, the Nasdaq Composite Index fell 0.4 percent as shares of Facebook and Twitter slid. In 1.08pm trading, the Standard & Poor’s 500 Index gained 0.4 percent.

US Treasuries moved higher, sending yields on the 10-year note four basis points lower to 2.81 percent.

“The bottom line is the trade issue and uncertainty related to that is not going to fade in one day because all of a sudden we started thinking that we would reach some sort of a settlement with China,” Krishna Memani, chief investment officer at OppenheimerFunds, told Bloomberg. “This is going to be somewhat of a long process for things to settle down.”

The Dow rose, led by a jump in shares of General Electric, which traded 6.1 percent stronger in early afternoon. 

The sudden increase is because of market chatter that Warren Buffett will take a position, Nicholas Heymann, an analyst at William Blair & Co, said Tuesday, Bloomberg reported. There’s no confirmation that Buffett will buy into GE. Buffett has previously said he would consider an investment in GE or assets of the company if the price was right.

In Europe, the Stoxx 600 Index climbed 1.2 percent from the previous close. The UK’s FTSE 100 Index rallied 1.6 percent, as did Germany’s DAX Index, while France’s CAC40 Index rose 1 percent.

Shares of France's Casino Guichard Perrachon rallied, closing 3.8 percent higher in Paris, after its upmarket Monoprix chain agreed to sell groceries via Amazon.

The deal, which is set to shake up one of Europe’s most competitive food retail market, is limited to the lucrative Paris market and its suburbs but future cooperation could extend beyond France, according to Reuters. A source familiar with the talks said on Tuesday that Amazon and Casino were negotiating a deal in Brazil either partnering or selling Casino’s local appliance and electronics chain Via Varejo, according to Reuters. 

Casino said the process of selling Via Varejo was continuing in Brazil with no new element to report and there was no partnership, Reuters reported.

(BusinessDesk)

 

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