The Dow industrials rallied Tuesday as investors welcomed news that billionaire Warren Buffett has reached out to ailing bond insurers and major lenders have announced a plan they say will help U.S. homeowners avoid foreclosure. However, a technology advance lost momentum late in the session, leaving the Nasdaq virtually unchanged. Stocks rose for most of the session, with the Dow at one point up more than 210 points. But the market was unable to sustain gains in the afternoon, with the technology sector and commodity stocks turning lower. Wall Street reacted favorably to news that Buffett has offered to rescue the bond insurers and that delinquent homeowners might get some help from the major mortgage lenders. Specifically, Buffett, the chief executive of Berkshire Hathaway investment fund, has offered to insure about $800 billion in bonds. The offer was made to the three big bond insurers, MBIA, Ambac Financial, and FGIC. In economic news, the Federal Reserve (Fed) auctioned $30 billion in funds to commercial banks in the fifth in its series of auctions that have added $130 billion to the banking system. The central bank has been adding money the financial system to lessen the effects of the credit crisis. An afternoon report showed that the U.S. budget rose less than expected in January. However, the federal budget deficit is more than double what it was a year ago in the four months since the beginning of the fiscal budget year. Light sweet crude for March delivery fell 81 cents to $92.78 a barrel on the New York Mercantile Exchange. The Dow Jones industrial average rose 133.40, or 1.1 percent, to 12,373.41. Twenty-five of the index's 30 components gained. The biggest advancers were J.P. Morgan Chase, DuPont, Citigroup, Boeing, and American Express. General Motors (GM) reported better-than-expected quarterly results but posted the biggest yearly loss in its history and indicated that it needs to keep cutting costs by offering buyouts to 74,000 workers. GM shares were lower. The broader Standard & Poor's 500 index rose 9.73, or 0.7 percent, to 1,348.86. The technology-heavy Nasdaq composite index fell 0.02 to 2,320.04. The New York Stock Exchange composite index rose 97.07 to 8,965.35. The American Stock Exchange composite index fell 1.43 to 2,245.18. And the Russell 2000 index rose 5.73 to 705.48.
