U.S. markets surged back into the green today, after crude oil rebounded to rally more than 2% off recent long-term lows. Meanwhile, Warren Buffett went shopping, spending a lot of money even for him.
Crude oil finished the day at $4, despite initially opening lower Monday morning as Chinese exports fell over 8% in July, putting pressure on energy markets.
But the Shanghai Composite rallied nearly 5% anyway, which turned the oil prices around.
The Dow Jones Industrial Average finished up by 1.3%, breaking a 7-day losing streak, while the S&P 500 Index was up 1.2% and the Nasdaq Composite was up 1.1%.
In all, every sector traded higher Monday, with energy and basic materials leading the parade.
The big news today, however, was Warren Buffett’s acquisition of Precision Castparts Corp (NYSE:PCP). That stock, plus Sprint Corp (NYSE:S) and Freeport-McMoRan Inc (NYSE:FCX) rang the closing bell as three of today’s best stocks.
Here’s the full story:
Sprint Corp (S)
S stock sprinted up almost 14% today, after launching its new Direct 2 You service in several different metropolitan areas across the U.S.
This new service allows customers to set up and transfer data from an old phone into a new one without having to go to the Sprint store. They can simply arrange a meeting with a representative anywhere they want, and the rep will provide personalized phone training and tips to assist the customer with the new Sprint mobile phone.
Sprint will continue to bring this service to more cities throughout the remainder of the year.
Freeport-McMoRan Inc (FCX)
FCX stock rose more than 10% today after announcing they have filed a prospectus supplement with the Securities and Exchange Commission in which they are seeking to sell up to $1 billion of common stock, and entered into an agreement with JP Morgan Securities LLC to do just that.
FCX stock has recently been cut in half from its May 2015 high around $23. FCX will use the proceeds of the sale to repay debts and other general corporate purposes.
Precision Castparts Corp (PCP)
One of the biggest winners on Wall Street today was Precision Castparts, up 19%, after it was purchased by Warren Buffett through Berkshire Hathaway Inc. (NYSE:BRK.A) for $37.2 billion.
The acquisition is said to be Buffett’s largest ever, and comes at a time when oil prices are at six year lows. Berkshire will pay $235 per share in cash for PCP’s outstanding stock.
Precision Castparts — a manufacturer of metal components for aerospace and oil and gas equipment — put in a double top about a year ago just above $270, and has been trading lower ever since. PCP closed on Friday at $193.88, about $7 above its 52-week low.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
