Saint Warren saves the day and boosts Wall Street.
A day ahead of Berkshire Hathaway’s annual meeting in Omaha, Warren Buffett’s revelation that his company had bought another 75 million Apple shares saved Wall Street from a nasty day out on Friday.
Buffett’s comments saw the Dow convert an opening 150-point drop to a 332 points, or 1.4% gain (closing at 24,262), on the back of a record-breaking performance by Apple shares.
Apple’s stock closed at a record, up 3.9%, or $6.94, at $183.83, contributing about 48 points to the Dow gain for the day.
That pushed Apple’s weekly gain to 13.3%, the best weekly performance since October 2011.
Apple shares hit a fresh all-time high of $US184.25 earlier in the day.
The surge saw the value of Berkshire’s Apple holding jump to $US44 billion – making the iPhone giant Buffett’s largest single holding.
Buffett’s news also helped the S&P 500 index end up about 1.3% at 2,663, and the Nasdaq Composite Index up by 1.7% at 7,209.
Friday’s gains weren’t enough to push the Dow and S&P into positive territory for the week, with both posting weekly falls of 0.2%. Friday’s gain saw the Nasdaq turn positive for the week, up 1.3%.
Buffett’s comments and the market reaction provoked more attention than the April jobs report of 164,000 new jobs (135,000 in March, up from 103,000 previously), a jobless rate of 3.9% (the lowest since 2000, before the tech wreck hit) and an unchanged annual wage growth figure of 2.6% (for the three months to April).
Apple’s rally began on Tuesday after the iPhone maker announced a new $US100 billion share buyback plan, posted better than expected earnings and issued a confident outlook for iPhone sales in spite of recent concerns of a slowdown in demand.
But the Sage’s remarks in an interview with CNBC on Thursday (with the details of his comments about Apple then released) saw the shares jolted even higher on Friday The extra 75 million Apple shares took the value of Berkshire’s investment to $US44 billion and making it Apple’s third-largest shareholder.
Friday’s jump lifted Apple’s market valuation to $US903.5 billion, the first time for it and any other listed company.
