Archive for the ‘Stock Market News’ Category
According to the Wall Street Journal, Microsoft is currently in talks with Facebook that could land the technology giant a 5% stake in the ever-growing social networking site. The move comes in response to concerns that Microsoft’s online footprint is lagging competitors such as Google and Yahoo. However, while Facebook adds hundreds of thousands of users each day, sales leads generated from the site aren’t as strong as traditional search platforms. Even so, most believe that a foray into this space is necessary, as social networking sites will play a large role in shaping the future of online advertising.
The FOMC chose to cut the fed funds rate by 50 basis points yesterday, hoping to mitigate market turmoil as a result of tightening credit markets and the housing downturn (the less important discount rate was also lowered as well). As expected, the markets reacted positively to the news, with the Dow Jones Industrials rising 2.5%, while the S&P added almost 3% to close at around 1,520. In addition, August CPI numbers came in lower today as well, which helped mitigate inflation worries and add support for the Fed’s move. However, while investors always welcome a lower cost of borrowing, many are left scratching their heads on the “moral hazard” issue.
Warren Buffett’s bellwether holding company, Berkshire Hathaway, was named as this years most respected company in Barron’s annual survey of companies. The survey looked at the largest publicly traded companies as measured by market cap, then asked professional investors to assign a rating of highly respect, respect, respect somewhat, or don’t respect for each company. It should come as no surprise that 75% of respondents chose “highly respect” for Berkshire, putting it ahead of companies such as Johnson & Johnson, Toyota, Procter & Gamble, and General Electric.
Barron’s: 100 Most Respected Companies (subscription required)
According to the Wall Street Journal, an unidentified man dressed in black and sporting camouflage face paint and a toy gun attempted to rob Warren Buffett’s home Wednesday evening. Luckily, a guard at the home confronted the man, causing him to assault the guard and flee (both Buffett and his wife were home at the time).
Buffett is one of the top 5 richest people in the world and still lives in the same house he bought in ‘58 for $32k. He’s also giving away 85% of his wealth to charity. Bottom line: Buffett doesn’t do what he does for the money - he’s a philanthropist. So, for all you would-be burglars: pick someone else to rob. Better yet, pick up the phone and ask for help - Buffett will probably just give you the money.
According to the Wall Street Journal, Fed Chairman Ben Bernanke hinted yesterday that the Fed may cut the federal-funds rate after all. I had assumed that the Fed would maintain a hawkish stance on inflation, and take a hard line on the fallout from subprime lending. However, I must have underestimated the pervasiveness of the issue, as consensus now calls for a decrease in the federal-funds rate from 5.25% to 5%. Speaking in Jackson Hole, Wyoming Bernanke chose his words carefully:
“It is not the responsibility of the Federal Reserve, nor would it be appropriate, to protect lenders and investors from the consequences of their financial decisions…But developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy.”
Sounds like Ben might just bail the market out after all.
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