Stocks Start Higher on Buffett investment in BofA

U.S. stocks opened higher Thursday after Warren Buffett’s company Berkshire Hathaway said it would invest $5 billion in Bank of America Corp. The Dow Jones Industrial Average rose 69.86 points to 11,390.57. The Standard & Poor’s 500 Index climbed 8.21 points to 1,185.81. The Nasdaq Composite Index advanced 8.17 points to 2,475.86.

Warren Buffett’s Berkshire Hathaway will invest $5 billion in Bank of America, stepping in to shore up the company in the same way he helped prop up Goldman Sachs during the financial crisis. Bank of America will sell Berkshire 50,000 shares of cumulative perpetual preferred stock with a 6 percent annual dividend, it said in a statement on Thursday.

The number of Americans seeking new jobless benefits rose for the second week in a row as thousands of phone workers at Verizon Communications filed claims, government data showed. New applications for U.S. unemployment compensation rose 5,000 to 417,000 , the Labor Department said Thursday. Initial claims from two weeks ago were revised up to 412,000 from an original reading of 408,000.’

Gold extended losses on Thursday to fall as much as $200 from Tuesday’s record high, as investors cashed in scorching gains in the metal after the CME Group hiked trading margins for the precious metal for a second time this month. Spot gold was down 2.2 percent at $1,711.99 an ounce at 7:01 a.m. EDT, having earlier touched a low of $1,702.44.

UBS and Citigroup lowered their forecast for global growth, with sharp reductions to its euro zone view and more modest cuts for China, but ruled out the likelihood of a recession for now. UBS slashed its global gross domestic product (GDP) growth forecast for 2012 to 3.3 percent, while Citigroup cut its global GDP growth view for 2011 to 3.1 percent from 3.4 percent, and for 2012, to 3.2 percent from 3.7 percent.

Foreclosures made up roughly one-third of all home sales this spring. Foreclosure sales, which include homes purchased after they received a notice of default or that were repossessed by lenders, accounted for 31 percent of the market in the April-June quarter, foreclosure listing firm RealtyTrac Inc. said Thursday.