(RTTNews) - Stocks have shown a strong move to the upside in recent trading on Tuesday, with the major averages climbing back near the unchanged line. Nonetheless, buying interest has remained somewhat subdued amid continued uncertainty about the outlook for the economy.

The markets came under pressure earlier in the session as profit taking largely overwhelmed positive news on factory orders and some isolated gains on the heels of two significant M & A announcements.

Earlier in the session, the Commerce Department reported that orders for manufactured goods increased by a little more than expected in the month of September, with the report also showing a notable increase in shipments.

On the M&A front, Berkshire Hathaway (BRKa) entered an agreement to acquire the shares of Burlington Northern Santa Fe (BNI) it does not already own for $100 per share, while Stanley Works (SWK) and Black & Decker (BDK) also announced a merger agreement.

The transactions resulted in some upbeat sentiment that M&A activity may be picking up, helping to limit the pullback.

In other news, the Federal Open Market Committee has begun its two-day rate setting meeting today and is scheduled to make an announcement regarding the near-term direction of monetary policy at 2:15 p.m. ET on Wednesday.

After its two-day meeting in September, the Federal Open Market Committee announced that it would maintain the target rate for the federal funds rate at 0 to 0.25%, saying it continued to believe that economic conditions warrant exceptionally low rates for an extended period.

The major averages have ticked back to the downside in the past few minutes, although they remain well off their lows for the session. The Dow is currently down 26.38 at 9,763.06, the Nasdaq is down 3.19 at 2,046.01 and the S&P 500 is down 0.69 at 1,042.19.

Stocks In The News

Swiss banking giant UBS AG (UBS) is moving notably lower in early afternoon trading after reporting a loss for the third quarter, reflecting hefty charges mainly related to financial liabilities. The stock is down by 4.2 percent, setting a two and a half month intraday low.

Mastercard Inc. (MA) is also moving lower despite reporting adjusted third-quarter earnings of $3.48 per share on revenues of $1.36 billion, which topped expectations. Shares are down by 3.6 percent, slipping to their lowest price in three and a half weeks.

On the other hand, Diedrich Coffee Inc. (DDRX) is on the rise after entering an agreement to be acquired by Peet’s Coffee & Tea (PEET) for $26 per share. Diedrich has jumped by 27 percent, bouncing off of the one-month closing low set on Monday.

In Focus: Economic Data, M&A News

As mentioned above, the Commerce Department reported that factory orders increased by 0.9 percent in September following an unrevised 0.8 percent decrease in August. The increase in orders came in slightly above economist estimates for an increase of about 0.8 percent.

In M&A news, Berkshire Hathaway entered an agreement to acquire the remaining shares of Burlington Northern Santa Fe it does not already own for $100 per share.

The transaction is valued at approximately $44 billion and is the largest ever made by Warren Buffet’s firm. The news has substantially lifted the railroad sector, despite an overall downtrend present in the equity markets.

Further, power tool maker Stanley Works and Black & Decker Corp. said that they have entered into a merger agreement to create Stanley Black & Decker, an $8.4 billion global industrial leader, in an all-stock transaction valued at about $4.5 billion.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed lower on Tuesday. Hong Kong’s Hang Seng Index lost 1.8 percent and India’s BSE 30 Index fell by 3.1 percent. The Japanese market was closed for a public holiday.

The major European markets closed notably lower. The U.K.’s FTSE 100 fell by 1.3 percent, while the German DAX Index and the French CAC 40 Index dropped by 1.4 percent and 1.5 percent, respectively.

In the bond markets, treasuries have ceded their early gains and are seeing modest weakness. Subsequently, the yield on the benchmark ten-year note is trading at 3.452 percent, posting a gain of 3.0 basis points on the day.

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Posted in Categories: Economy, Eurozone, Japan, Releases, Switzerland, USA.

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