Mixed session for the major market indices with transports rising, but semiconductor stocks on the decline. The Dow (^DJI) fell 17.53 to a level of 9,771.91. The S&P 500 (^SPX) gained 2.53 points to 1,045.41. The Nasdaq (^IXIC) rose 8.12 points to 2,057.32. Volume was moderate on the session with the NYSE trading 1.30 billion shares and the Naz turning over 2.15 billion shares. Market breadth was positive by a 19-to-12 and 16-to-11 margin on the Big Board and Naz respectively.

Transportation stocks got a boost this morning on news Berkshire Hathaway (BRK.B) would buy Burlington Northern (BNI) for $100 a share, or $44 billion in cash and stock. Warren Buffet is showing a lot of faith in the economy, yet this news didn't provide the boost one might anticipate. Nonetheless, BNI shares rose 27.51 percent to $97.00. Berkshire "B" shares rose 1.85 percent to $3,325.35 and the company announced these shares will undergo a 50-to-1 split.

In other merger news, Stanley Works (SWK) agreed to buy Black & Decker (BKD) for $3.5 billion in stock. This news benefited both tool makers with SWK rising 9.88 percent to $49.61 and BDK shares up 30.8 percent to $61.91.

Gains in the Dow transports was offset by declines in shares of Intel (INTC). The chip maker was the largest decliner on the Dow, falling 2.68 percent to $18.50. Morgan Stanley lowered its price target on the stock to $22 from $25 and lowered its rating. Morgan moved Intel to "Equal-Weight" from "Overweight" and moved the entire semiconductor sector to "Cautious" from "Attractive." The Semiconductor HOLDRs (SMH) fell 1.12 percent on the session to $23.90.

Johnson & Johnson (JNJ) shares fell one percent after the company announced plans to cut 7,000 to 8,000 jobs globally. This is expected to save the company a billion dollars in 2010. JNJ shares have not participated in the majority of gains seen this past year with the stock actually down four percent in the past 52-weeks.

The focus Wednesday will be on economic data, especially the statement by the FOMC at 2:15 p.m. est. Other reports set for release tomorrow include the ADP Employment report, the Challenger report and the ISM Non-Mfg. Index. Traders are anticipating no change in the Fed funds target rate, but how the committee views the economy could have a major impact on trading.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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