August 26, 2011 in Business



Buffett bets big on Bank of America

NEW YORK – Warren Buffett’s Berkshire Hathaway Inc. announced Thursday that it would invest $5 billion in Bank of America Corp., a much-needed vote of confidence that sent the beleaguered bank’s stock soaring 9 percent.

“Buffett is Bank of America’s white knight,” said Glenn Schorr, bank analyst at Nomura equity research.

The legendary investor said in a prepared statement that he reached out to Bank of America CEO Brian Moynihan to say he wanted to invest because he considered the bank a “strong, well-led company.”

As recently as Tuesday, Bank of America’s stock had plunged 50 percent from a year ago on concerns over its mortgage problems and worries that it would have to sell large amounts of stock to shore up its balance sheet.

Associated Press

Boeing lands deal to sell 100 jets to Delta

NEW YORK – Delta Air Lines on Thursday confirmed its plan to buy 100 Boeing 737 jets as part of a fleet upgrade, with delivery set for 2013 to 2018.

The order announced Thursday is valued at $8.5 billion at list prices, although airlines commonly get discounts. The newer planes offer perks for travelers, including a roomier cabin, less engine noise and more room in overhead bins. But they also have huge benefits for airlines because they are more efficient, require less maintenance and burn less fuel.

Delta Air Lines Inc., which is based in Atlanta, said in January it was considering an order for as many as 200 jets – possibly with options for 200 more – to replace the aging fleet it uses for domestic flying.

Associated Press

Fed chief to outline options for economy

WASHINGTON – Many on Wall Street hope Federal Reserve Chairman Ben Bernanke will unveil a new effort today to boost the economy in a highly anticipated speech in Jackson Hole, Wyo.

Economists say a major new program is unlikely. But Bernanke will likely lay out the Fed’s options for lowering long-term interest rates even further.

One reason few expect any such dramatic step this time is that just two weeks ago, Fed policymakers said they would keep short-term rates at record lows for two more years.

“It would seem strange for Bernanke to conclude so soon that this move was not enough,” Paul Dales, of Capital Economics, said in a note to clients.

Associated Press

N.J. governor calls for 1-year ban on fracking

TRENTON, N.J. – Gov. Chris Christie has recommended a one-year ban on a natural gas drilling process known as hydraulic fracturing, disappointing environmentalists who had hoped New Jersey would become the first state to permanently forbid the technique.

A coalition representing natural gas interests applauded the decision as economically responsible.

The state Legislature passed a bill in June to permanently ban the procedure known as fracking. On Thursday, Christie sent it back with a conditional veto recommending that the ban be lifted in a year.

The legislation is largely symbolic because there’s not enough natural gas under New Jersey to drill for, experts say. Opponents, however, say New Jersey could send a strong message about the importance of ensuring water quality by enacting an outright ban.

Associated Press

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