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Two Ways to Play: Berkshire Acquires Burlington Northern


Strengthen your portfolio in good times and bad.

Berkshire for BNI

Berkshire Hathaway (BRK.A, BRK.B) will acquire Burlington Northern Santa Fe Corporation (BNI) for the remaining 77.4% of outstanding shares the company doesn't already own.

The negotiated price is for $100 a share, making it a premium of over 30% to yesterday's closing price and valuing the transaction at more than $44 billion.

Berkshire Chairman and CEO Warren Buffet said in a statement, "Our country's future prosperity depends on its having an efficient and well-maintained rail system. Conversely, America must grow and prosper for railroads to do well."

As BNI is a key member of the Transports, see Minyan Jeff Saut's piece yesterday, Why a Dow Theory Sell Signal Never Happened.

From the Bull Pen: We talked about the Transports yesterday identifying $64 support on the IYT ETF. Is this the news to rescue it from the brink of death? Also consider FedEX (FDX) filling the gap at $72. A sell stop can be set below that level.

From the Bear Cave
: Bears can look elsewhere like retailer Ross Stores (ROST). Taking a technical look, previous support at $45 is now resistance. For those playing the downside, consider setting a buy stop above that level.

A Quick Check Around the World

Asian trading closed with the Nikkei (Closed), India -3.09%, Hang Seng -1.76%, Shanghai 1.22%, and Taiwan -0.17%.

Across the pond, we see the FTSE -2.19%, CAC -2.19%, DAX -1.79%

As of 8:10 a.m. EST, S&P Futures are trading -6.00 to 1033.00 and Nasdaq futures are -8.500 to 1660.50.

A Look at Commodities

Over in commodities, crude oil is -0.50 to 77.61 while gold is +8.50 to 1062.50 this morning. Silver is +0.01 to 16.450 and copper -0.025 to 2.92.

The dollar Index is +0.4000 to 76.6900.

On the Radar


10:00 Factory Orders 1.0% cons.

Click here for the full trading radar.

Welcome back! Good luck!
No positions in stocks mentioned.

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