Berkshire lifts Wall Street overnight

Trader Luigi Muccitelli, left, works with specialist Allison Gamba on the floor of the New York Stock Exchange. File Photo / AP

Wall Street gained overnight amid solid US corporate earnings including from Warren Buffett's Berkshire Hathaway and as a Portuguese bank bailout diminished concern about another flare-up for the euro-zone's credit crisis.

In afternoon trading in New York, the Dow Jones Industrial Average rose 0.18 per cent, the Standard & Poor's 500 Index gained 0.45 per cent, while the Nasdaq Composite Index added 0.52 per cent.

Gains in shares of Walt Disney and Caterpillar, up 2 per cent and 1.1 per cent respectively, led the Dow higher.

Last week the S&P 500 posted its largest drop since 2012.

"We're in a very strong bull market right now," Adam Sarhan, chief executive of Sarhan Capital in New York, told Reuters.

Shares of Berkshire Hathaway climbed, up 3 per cent, after the company posted late Friday a record net income in the second quarter. Buffett's company also reported that it now has about US$50 billion in cash for acquisitions.

It wasn't all blue skies on Wall Street.

Shares of Michael Kors plunged, down 6.5 per cent, after the company said its gross margin will drop this year.

Shares of McDonald's fell, last down 0.4 per cent, after the company said sales in China and Japan are suffering a "significant negative impact" because of a food safety scandal in China. The affected markets account for about 10 per cent of its total revenue, the fast-food restaurant chain operator said.

"Risks have ticked up in the near-term regarding McDonald's business in China and Japan," Janney Capital Markets analyst Mark Kalinowski wrote in a note, Reuters reported.

In Europe, the Stoxx 600 Index ended the session with a 0.2 per cent decline from the previous close. The UK's FTSE 100 Index inched 0.02 per cent lower, while Germany's DAX shed 0.6 per cent. France's CAC 40 rose 0.3 per cent.

A Sentix report showed that investor confidence in the euro zone was worse than expected in August, with the sentiment index declining to 2.7, from 10.1 in July.

Portugal's PSI 20 Index rose 1 per cent after the nation's central bank announced a US$6.6 billion bailout for Banco Espirito Santo. That move also helped lift other banks across the region.

"The plan carries no risk to public finances or taxpayers," Carlos Costa, Bank of Portugal's governor, told reporters in a late night news conference in Lisbon, Reuters reported.