Stocks finished mixed Tuesday as techs struggled after a downgrade on Intel. Transports rose following news that that Warren Buffett is buying Burlington Northern railroad. Industrials also gained after this week's encouraging manufacturing reports.
The Dow Jones Industrial Average lost more than 17 points, or 0.2 percent. The Nasdaq added 0.4 percent and the S&P 500 gained 0.2 percent.
Intel was the biggest drag on the Dow, down 2.7 percent, after Morgan Stanley downgraded the stock to "equal-weight" from "overweight," and cut the entire industry to "cautious" from "attractive."
The Philadelphia Stock Exchange semiconductor index dropped about 1.3 percent.
Johnson & Johnson fell 1 percent after the health-care products maker announced plans to slash about 7,000 to 8,000 jobs, which amounts to 6 to 7 percent of its workforce.
The big buzz in the market was that Warren Buffett's Berkshire Hathaway is buying Burlington Northern Santa Fe for $100 a share in a deal valued at $26 billion. Simultaneously, Buffett said Berkshire is offering a 50-for-1 stock split for its Class B shares.
Burlington Northern shares shot up more than 28 percent.
The news gave a boost to transports — and not just railroad stocks. FedEx and UPS rose, as did major airlines. The Dow Jones transportation index rose 5.3 percent.
But Ford and other auto makers declined amid worries about auto sales: Ford said its sales fell, while GM said sale rose last month. Read more.
Industrial and material stocks continued to benefit from the encouraging manufacturing readings from all over the globe yesterday: Dow componets Caterpillar, DuPont and United Technologies all advanced, despite the overall downward pull on the market today.
It's been a big week for M&A activity: On Monday, Stanley Works agreed to buy rival tool maker Black and Decker in an all-stock deal valued at $3.5 billion, based on Monday's closing prices, plus the assumption of debt.
On the earnings front, Swiss bank UBS reported its fourth straight quarterly loss and missed analysts' target.
That, plus news that Britain's Royal Bank of Scotland and Lloyds Banking Group are selling hundreds of branches, rattled the U.S. banking sector. Dow components Bank of America and JPMorgan struggled to hold gains for any length of time. Citigroup and some regional banks were even harder hit.
MasterCard shed 1.6 percent. The credit-card provider beat earnings expectations as it raised fees to banks and slashed expenses.
After the bell today, we'll get results from Dow component Kraft Foods .
Monday's session was topsy-turvy: Stocks charged out of the gate, then retreated, before staging a late rally.
The economic calendar is light today:Factory orders rose 0.9 percentin September, after a 0.8-percent drop in August, the Commerce Department reported. Economists were expecting a gain of 1 percent.
The Fed begins a two-day-meeting today. Policy makers are still debating their next stepsamid signs of recovery. Investors will be watching for any change in the "for some time to come" language the Fed has used for current interest-rate levels. The statement is due out at 2:15 pm ET on Wednesday.
Still to Come:
WEDNESDAY: Weekly mortgage applications; ISM services index; weekly crude inventories; Chrysler business plan; Fed statement; Earnings from Comcast, Time Warner, Martha Stewart, Cisco, News Corp., Prudential and Qualcomm
THURSDAY: Retailers report October sales; BOE, ECB statements; weekly jobless claims; Earnings from Toyota, CVS, Sirius, Unilever, CBS, Nvidia and Starbucks
FRIDAY: October jobs report; Geithner speaks; Droid phone launches; wholesale trade; consumer credit; Fed's Duke speaks
Send comments to cindy.perman@nbcuni.com.
