U.S. Stock Futures Rise on Buffett's Goldman Sachs Investment

By Kyung Bok Cho

Sept. 24 (Bloomberg) -- U.S. stock-index futures rallied after Goldman Sachs Group Inc. won backing from Warren Buffett's Berkshire Hathaway Inc.

Goldman, which this week transformed itself from the biggest U.S. securities firm to the fourth-largest bank by assets, rose 7.8 percent in after-hours trading in New York after saying Berkshire Hathaway will buy $5 billion of perpetual preferred shares. Morgan Stanley gained 11 percent.

Standard & Poor's 500 Index futures expiring in December climbed 1.3 percent to 1,202.90 as of 1:10 p.m. in Tokyo. Dow Jones Industrial Average futures added 1.2 percent to 10,984.

The S&P 500 lost 1.6 percent yesterday, capping a two-day decline of 5.3 percent. Stocks fell as Congress members expressed skepticism about Treasury Secretary Henry Paulson's $700 billion bank bailout plan, which Federal Reserve Chairman Ben S. Bernanke said is critical for preventing a recession.

Goldman rose 7.8 percent to $134.75, extending yesterday's 3.5 percent increase.

In addition to Buffett's investment, Goldman said yesterday it plans to sell at least $2.5 billion of common stock to the public in its first such offering since 2000. Sumitomo Mitsui Financial Group Inc., Japan's second-biggest bank by market value, is considering purchasing some shares, two people familiar with the plans said.

Morgan Stanley surged 11 percent to $30.97. Japan's Mitsubishi UFJ Financial Group Inc. said on Sept. 22 that it will buy as much as 20 percent of Morgan Stanley for up to 900 billion yen ($8.4 billion).

Wachovia Corp., the fourth-largest U.S. bank, climbed 6.8 percent to $15.75.

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