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Bank of America: Buffett Deal Loser

NEW YORK ( TheStreet) -- Bank of America (BAC - Get Report) was the loser among major U.S. financial names on Tuesday, with shares declining 1% to close at $12.28.

The broad indexes all saw 1% gains, after the U.S. Census bureau said that new orders for durable goods in the United States increased by 5.7% during February, which was a major recovery from a decline of 3.8% in January. The rise in orders in February from January exceeded the average estimate of a 3.8% increase, among economists polled by Thomson Reuters.

Total durable goods orders have increased in five of the last six months.

The big driver in the overall increase in orders for manufactured durable goods was a 21.7 month-over-month increase in transportation equipment orders, to $74.4 billion in February. Transportation orders had declined by 17.8% in January, to $61.1 billion. The February increase in transportation orders was "led by nondefense aircraft and parts, which increased $9.0 billion," according to the Census Bureau.

Deutsche Bank analyst Greg Poole said in an earlier report that "of the various indicators scheduled for release, durable goods are the most important in our view, because they are the most forward-looking of the releases. Moreover, durable goods tell us about the state of capital spending, a key input of corporate decision-making that over time tends to be highly correlated with hiring."

The Census Bureau and the Department of Housing and Urban Development jointly announced that February sales of new single-family homes declined 4.6% from January to seasonally adjusted annual pace of 411,000 in February.

Buffett, Goldman and Bank of America


Goldman Sachs (GS - Get Report) announced early Tuesday that it had amended the terms of a warrant issued to Warren Buffett's Berkshire Hathaway (BRK.B - Get Report) in October 2008, in connection with Berkshire's purchase of $5 billion worth of Goldman preferred shares, which had a coupon of 10%.

The original five-year warrant allowed Berkshire to purchase up to 43,478,260 Goldman shares at a price of $115 a share. Under the terms of the amended warrant, Berkshire will only be able to exercise the warrant on Oct. 1, and will be granted a number of Goldman shares, "based on the amount by which the average closing price of the Company's common stock over the 10 trading days preceding October 1, 2013 exceeds the exercise price of $115."

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