Market Talk

US stocks essentially flat after the dollar’s overnight strength, which has zapped stocks lately, was blunted by Warren Buffett’s splashy acquisition of old-economy railroad Burlington Northern.

DJIA slips 18 to 9772, S&P 500 adds 3 to 1045, Nasdaq Comp gains 8 to 2057. Still, bulls are likely to take it as a positive, since in the misty hours this morning stocks looked like they were going to get nailed again. DJ futures were down nearly 100 points at about 6:38 a.m. ET (when I heard the market update on Bloomberg Radio on my way to the bus stop.)

But then Buffett comes along, mustering up all the heartland nostalgia he can, and says he’s buying the 77% of Burlington Northern he didn’t already own. Stocks strengthened, but never could get a rally going. They fell at the open, rallied, fell again, and finished mixed. What will be interesting to see now is how much staying power the enthusiasm over Buffett’s deal has.

The Oracle made a big deal out of this being a bet on the economy, and by some extension America. That’s a nice sentiment and it certainly plays well to the home crowd, but the reality is he made a business decision to buy a stable company that will pay off for him steadily over the years, but it has far less impact for the average American.

Elsewhere in America, J&J’s cutting up to 8,200 jobs. Not much heartland nostalgia in that move, and it shows that companies continue to retrench, which means less growth, which means less hiring, which means worse unemployment and underemployment and wage growth.

It’s nice that Buffett’s got a railroad to play with now. But it doesn’t mean much for Mr. and Mrs. America.