US stocks rise after Buffett offers assistance

Buffett said his Berkshire Hathaway Inc. holding company had offered a second level of insurance on up to $800 billion in municipal bonds.

warren buffet 88 298 (photo credit: AP)
warren buffet 88 298
(photo credit: AP)
SHARES TEL AVIV The Tel Aviv-25 Index rose the most since last Sunday, adding 22.45, or 2.1 percent, to 1,073.99 as 23 members gained, one fell and one was unchanged. Investors traded about NIS 2.30 billion in shares and convertible securities. Clal Industries & Investments rose the most since December 31, adding NIS 0.60, or 3.5%, to NIS 18. The holding company controlled by Nochi Dankner wants to build an electric power plant near Haifa using pumped storage technology, Globes reported. The plant may cost as much as $150 million to build and would produce 150 megawatts of electricity, it said. Gazit Globe rose for the first time in seven days. Israel's third-largest property developer by market value gained NIS 1.44, or 4.6%, to NIS 33.12. Israel Discount Bank rose NIS 0.13, or 1.4% to NIS 9.37, its first gain in three days. Nice Systems rose for a third day, adding NIS 4.20, or 3.8%, to NIS 114.10. WALL STREET Wall Street surged higher Tuesday after billionaire investor Warren Buffett offered to help out troubled bond insurers, easing some of the market's concerns about further deterioration in the credit markets. The Dow Jones industrials rose about 200 points. In an interview on CNBC, Buffett said his Berkshire Hathaway Inc. holding company had offered a second level of insurance on up to $800 billion in municipal bonds. The reinsurance offer is for bond insurers Ambac Financial Group Inc., MBIA Inc. and Financial Guaranty Insurance Co., known as FGIC. In midday trading, the Dow rose 199.40, or 1.63%, to 12,438.93. Broader stock indicators also moved higher. The Standard & Poor's 500 index advanced 18.312, or 1.37%, to 1,357.44, and the Nasdaq composite index rose 23.15, or 1%, to 2,343.12. EUROPE Buffett's offer to bail out troubled bond insurers in the US helped allay fears of further immediate pain from the subprime credit crisis and propelled European stocks higher Tuesday. The Dow Jones Stoxx 600 Index gained 3.3%, to 323.0. In terms of national markets, the UK's FTSE-100 Index rose 3.5% to 5,910.0, while France's CAC-40 Index advanced 3.4% to 4,840.7. Germany's DAX index rose 3.3% to 6,967.8. ASIA Asian markets rose Tuesday as more exchanges returned from holiday breaks, but investors continued to worry about the region's exposure to the US subprime loan crisis and the health of the world's largest economy. In Japan - where markets were closed Monday - the benchmark Nikkei 225 stock index rose just 0.04% to close at 13,022. Hong Kong's blue chip Hang Seng Index rose 1.4% to 22,922, partly offsetting Monday's 3.6% decline. CURRENCIES The shekel rose 2.6% to 3.5325 per dollar, the most since January 23 and the highest level since January 1998, before trading at 3.5906 by 6:01 p.m. in Tel Aviv, from 3.6572 on Monday. The euro rose the most this month against the yen and dollar after German investor confidence unexpectedly strengthened this month. The euro climbed to 156.79 yen as of 11:11 a.m. in New York, from 155.30 Monday, for the biggest gain since January 24. It rose to $1.4598, from $1.4519, the steepest advance since January 30. COMMODITIES Crude oil futures fell Tuesday, reversing a three-day rally, after the US Energy Department cut price and demand forecasts for this year, citing the slowing US economy. Expectations of an increase in oil stocks also pressured prices. Light, sweet crude for March delivery fell 97 cents to $92.62 a barrel on the New York Mercantile Exchange. After oil rose $6.45 a barrel since last Wednesday, some investors moved to lock in profits in case the Energy Department, in a separate report on Wednesday, reports a much bigger-than-expected jump in supplies. Gold prices tumbled Tuesday as traders cashed in profits after three days of gains and a Wall Street rally drew investors back into stocks. Gold reversed a three-day rally on the New York Mercantile Exchange, where an ounce of gold for April delivery lost $17 to fetch $909.70 in early afternoon trading.