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Midday Market Update

Stocks Mostly Lower; China, Sequester Eyed

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U.S. Market    
Stocks pared early losses but were mostly lower at midday. A sharp sell-off in China weighed on many of the Western markets after Chinese officials late last week announced new restrictions to property purchases to ease rising real estate prices in the country. The announcement led to a drop in Chinese property stocks.

Meanwhile, investors are keeping a watch on any developments in Washington with the beginning of sequestration in the United States and the ensuing automatic spending cuts. 

Separately, the New York Institute for Supply Management's Current Business Conditions index increased to 58.8 last month from 56.7 in January. It was the best reading in 11 months and is indicative of expanding activity in the region. 

The Dow, the S&P 500, and the Nasdaq were each down by 0.2% at midday. 

Stocks on the Move
Late Friday,  Berkshire Hathaway (BRK.A) (BRK.B) chairman and CEO Warren Buffett released his annual letter to shareholders, detailing the firm's 2012 performance, which he called "subpar," as the firm's book value gain was less than that of the S&P 500. Buffett also reiterated that  Berkshire will not pay a dividend and will continue to pursue acquisition opportunities, among other strategies, with the firm's excess cash. Berkshire A shares were down by 1.0% at midday, while the B shares had lost 1.2%. 

Also late Friday,  Transocean (RIG) announced a year-over-year reversal in fourth-quarter results, posting a profit of $456 million, better than expected, compared with a loss of $6.17 billion a year earlier, which came as a result of large charges. Sales also rose by 9%. The company is continuing efforts to improve its safety procedures following the Gulf oil spill. 

 Elan (ELN) shares were up 1.1% at midday after the firm said it would improve its dividend tied to sales of one of its products, a move to keep shareholders invested in the firm. However, speculation remains about a potential hostile takeover.

Foreign Markets
Stocks in Asia were mostly lower on the news in China. The Shanghai Composite fell 3.6%, and the Hang Seng lost 1.5%. The Nikkei 225 was 0.4% higher, however. 

In Europe, the DAX had lost 0.2%, and the FTSE 100 fell by 0.5%. The Paris CAC was up by 0.3%. 

Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.