* Berkshire bid for Burlington Northern boosts industrials
* Morgan Stanley downgrades semis, Intel falls
* Dow off 0.2 pct, S&P up 0.2 pct, Nasdaq up 0.4 pct
* For up-to-the-minute market news, click []
(Updates to close)
By Caroline Valetkevitch
NEW YORK, Nov 3 (Reuters) - The S&P 500 and Nasdaq rose
slightly on Tuesday as news of a major railroad acquisition
helped sentiment, but the Dow edged lower on caution before a
Federal Reserve statement on interest rates and the economy.
Morgan Stanley's downgrade of semiconductor stocks also
limited a broad advance.
The Dow Jones Transportation Average<.DJT> rose 5.3 percent
as Warren Buffett's Berkshire Hathaway <BRKa.N> agreed to buy
Burlington Northern Santa Fe Corp <BNI.N> in a deal that values
the railroad company at $34 billion, Berkshire's biggest deal
ever. Burlington shares jumped 27.5 percent to $97. For
details, see []
"One of the themes we've been pointing toward is that the
next catalyst after earnings is M&A activity, and we've had
some big ones," said Tim Smalls, head of U.S. stock trading at
brokerage firm Execution LLC in Greenwich, Connecticut. "People
consider companies to be cheap."
The Federal Open Market Committee began a two-day meeting
on Tuesday. While investors expect the Fed to leave rates close
to zero, they are nervous to hear what the officials say about
the economic outlook.
The Dow Jones industrial average <> slipped 17.53
points, or 0.18 percent, to end at 9,771.91. But the Standard &
Poor's 500 Index <.SPX> added 2.53 points, or 0.24 percent, to
finish at 1,045.41. The Nasdaq Composite Index <> advanced
8.12 points, or 0.40 percent, to close at 2,057.32.
The S&P is up 55 percent since its early March lows, partly
because of stronger-than-expected economic data.
Semiconductors ranked among the major decliners after
Morgan Stanley downgraded the sector to "cautious" from
"attractive," and cut its view on Dow component Intel Corp
<INTC.O>, saying inventories were beginning to creep up in the
sector.
The PHLX semiconductor index <.SOXX> lost 1.3 percent.
[] Shares of Intel slid 2.7 percent to $18.50 on
Nasdaq.
Even so, the Nasdaq eked out a gain as investors searched
for bargains among tech shares that have suffered losses
recently. The Nasdaq has been down five of the past eight
sessions.
In other deal news, Black & Decker Corp <BDK.N> shares
jumped 31 percent to $62, a day after Stanley Works Inc <SWK.N>
said it struck a deal to buy the company. Stanley shares rose
10.1 percent to $49.69.
Higher oil prices helped lift the S&P 500, with the S&P
energy sector index <.GSPE> up 1.1 percent.
U.S. oil futures <CLZ9> shot up $1.47, or 1.88 percent, to
settle at $79.60 a barrel. ConocoPhillips' <COP.N> stock gained
1.5 percent to $50.75.
Shares of Black & Decker jumped 23.9 percent to $58.66,
while shares of Stanley Works were up 4.8 percent at $47.30.
Data showed new orders received by U.S. factories rose more
than expected in September but had little impact on the broader
market. []
Volume was below average on the New York Stock Exchange,
with 1.38 billion shares changing hands, below last year's
estimated daily average of 1.49 billion, while on the Nasdaq,
about 2.18 billion shares traded, below last year's daily
average of 2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of 18 to 11, while advancing stocks beat decliners on
the Nasdaq, by about 8 to 5.
(Reporting by Caroline Valetkevitch; Editing by Kenneth
Barry)
