Buffett makes his move
RTGAM
Warren Buffett, the world's greatest investor and the one person who can seemingly move markets with a quick telephone call, was at the forefront of stock market activity on Tuesday morning after he offered a second level of insurance to troubled bond insurers MBIA Inc., Ambac Financial Group Inc. and FGIC Corp. If the rescue effort - worth up to $800-million (U.S.) - is accepted, it could give the insurers a AAA credit rating.
His move, reported by CNBC after he called the station's Squawk Box, acted like a vote of confidence for investors, who rallied stocks higher in Europe and pushed up stock index futures for major U.S. stock market indexes. In Europe, major indexes were up nearly 2 per cent. The U.K.'s FTSE 100 was 1.8 per cent in afternoon trading (local time), led by banking giant HSBC Holdings PLC. Germany's DAX index was up 1.9 per cent.
In the United States, S&P 500 futures rose 0.6 per cent. Meanwhile Japan's Nikkei 225 was relatively flat in overnight trading and Hong Kong's Hang Seng index was up 1.4 per cent.
In Canada, investors will likely be reacting to the Buffett news when markets open, even though Mr. Buffett has supposedly received . But this will also be digesting Monday's BlackBerry service interruption, which may weigh on Research In Motion Ltd.
Copyright 2001 The Globe and Mail