The stock market in the United States has been overwhelmed by the prospects of a global economic slowdown, a euro zone debt problem and other issues, but on Thursday there were new developments to contend with: the resignation of Steven P. Jobs as chief executive of Apple and the investment by Berkshire Hathaway, which is run by Mr. Buffett, in Bank of America.
The two surprises came as investors were trying to align their expectations for Friday’s address by the chairman of the Federal Reserve, Ben S. Bernanke, at a symposium in Jackson Hole, Wyo. Some are betting on clearer guidance, at the least, on possible stimulus measures, but there was no certainty that any would be forthcoming.
The news that Mr. Buffett had made the investment in preferred stock in the bank took place before the opening bell on Wall Street, sending futures higher. The stock reached as high as $8.80, a 27 percent gain, but the heights could not be sustained. Bank of America was trading at $7.83 by midday, and financials in general settled back to about 0.5 percent higher.
The injection from Mr. Buffett “should dampen the heightened volatility” in recent trading of the stock, said Glenn Schorr, an analyst with Nomura. He added that it was a “clear vote of confidence for the stability of Bank of America’s franchise.”
By midday, the Standard Poor’s 500-stock index and the Dow Jones industrial average were both just over 1 percent lower, with energy stocks performing the worst as crude oil prices fell.
The technology-heavy Nasdaq composite index fell 1.25 percent. Apple stock was down 1.3 percent, much less than it had fallen in overnight trading. Late Wednesday Mr. Jobs, who has been on a medical leave, announced his resignation as chief executive. “Based on the share reaction, we believe that investors had been bracing for this,” said William Kreher, senior technology analyst at Edward Jones. “In a strange way, this does create some certainty,” he said, adding that the stock had a “buy” rating.
Gold, usually a safe haven asset, continued to fall, partly because of a rise in margin requirements, which can affect trading. Comex futures were down just over 1 percent at about $1,730 an ounce. Jason D. Pride, the director of investment strategy at Glenmede, said the metal had been overpriced recently.
Yet the rush to safety seemed evident in bonds, as the 10-year Treasury price rose and its yield fell to 2.226 percent.
The outlook for the economy was somewhat soured on Thursday with a government report showing new claims for unemployment benefits in the United States rose more than expected last week, lifted mostly by striking Verizon Communications workers.
Mr. Pride said that there was enough risk of slow growth that the chances for recession were “higher than normal.”
“I think there is a lot of volatility right now because of all these uncertain factors we have,” he said. “Hopes are built in for Ben Bernanke to do something big,” he said. “If he doesn’t, it is a negative surprise to the market because enough people have factored it in.”
In Europe, markets lost ground through the afternoon, while Asia-Pacific indexes closed up more than 1 percent.
Anticipation that Mr. Bernanke could outline more stimulus measures for the ailing American economy was enough to help calm markets this week after four weeks of sharp declines.
“People are becoming a little more cautious that maybe we don’t get that big move” from the Fed, said Edmund Shing, head of European equity strategy at Barclays Capital. The Euro Stoxx 50 index was 1 percent lower Thursday and France’s CAC 40 index was down 0.7 percent.
Some banking stocks in Europe rose after Crédit Agricole, one of France’s biggest banks, reported earnings that beat analysts’ expectations. In London, shares in the commodities giant Glencore and the liquor maker Diageo rose after the companies reported higher earnings, helped by growing demand from emerging markets.
In Japan, the Nikkei 225 closed up 1.5 percent at 8,772.36 points, while the key indexes in Australia and South Korea added 1.1 percent and 0.6 percent, respectively.
The Hang Seng in Hong Kong gained 1.5 percent, while the Shanghai composite index closed 2.9 percent higher.
Julia Werdigier reported from London and Bettina Wassener contributed reporting from Hong Kong.
Article source: http://www.nytimes.com/2011/08/26/business/daily-stock-market-activity.html?partner=rss&emc=rss