Dow soars 490 points, with bank stocks leading the way

NEW YORK – A move by the world’s central banks to lower the cost of borrowing exhilarated investors Wednesday, sending the Dow Jones industrial average soaring 490 points and easing fears of a global credit crisis similar to the one that followed the 2008 collapse of Lehman Brothers. It was the Dow’s biggest gain since March 2009.

Large U.S. banks were among the top performers, jumping as much as 7 percent. Markets in Europe surged too, with Germany’s DAX index climbing 5 percent.

JPMorgan Chase & Co. jumped 7.7 percent, the most of the 30 Dow components. Morgan Stanley rose 10 percent and Citigroup Inc. 8.2 percent.

The Dow rose 4.2 percent to close at 12,045. It has more than gained back the 564 points it lost last week and is up 7 percent so far this week.

The Standard & Poor’s 500 closed up 52, or 4.3 percent, at 1,247. The Nasdaq composite index closed up 105, or 4.2 percent, at 2,620.

Berkshire Hathaway buys Nebraska, Iowa newspapers

OMAHA, Neb. – Warren Buffett’s Berkshire Hathaway said Wednesday that it is buying the Omaha World-Herald Co. and expanding the firm’s newspaper holdings despite Buffett’s misgivings about the industry.

Buffett told the World-Herald that Berkshire agreed to pay $150 million cash and assume $50 million in debt to acquire the newspaper he’s been reading since he was a child.

The deal must be approved by the Omaha World-Herald’s employee owners and other shareholders and also includes daily newspapers that the company owns in Council Bluffs, Iowa, and Grand Island, York, Kearney, North Platte and Scottsbluff in Nebraska.

Buffett did not immediately respond to an interview request Wednesday. Berkshire’s chairman and chief executive previously has said he would be unlikely to add to Berkshire’s newspaper investments because of the industry’s dwindling returns. Berkshire owns the Buffalo News and it has a sizable investment in the Washington Post Co.

In a written statement Wednesday, Buffett suggested the World-Herald Co. is in better shape than most newspapers. “The World-Herald delivers solid profits and is one of the best-run newspapers in America, and we are pleased to have Terry Kroeger and his team join Berkshire Hathaway,” Buffett said.

Economy showing growth, regional bank survey finds

WASHINGTON – The economy expanded at a slow-to-moderate pace in most areas of the country over the past two months, but hiring was weak, according to a Federal Reserve survey released Wednesday.

The survey, known as the Beige Book, is based on anecdotal information from the Fed’s 12 regional banks. The report is based on data collected before Nov. 18. Some highlights:

The Boston branch – which includes Maine, Vermont, Massachusetts, New Hampshire, Rhode Island and part of Connecticut – reported business revenue increases but an uncertain outlook. Software and information technology service companies reported strong demand. Real estate markets remained weak.

In New York, manufacturers reported business conditions are stable but they plan to add workers in coming months. Consumer spending is expanding at a moderate pace.

– From news service reports