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| Currency | US Dollar |
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| Japanese Yen to US Dollar | 0.010414 |
| Canadian Dollar to US Dollar | 0.861846 |
A big finish pushed U.S. stocks higher today, as markets weathered dismal news on auto sales and the prospect that General Motors (GM, news, msgs) could be in bankruptcy by the end of the year unless it gets government help.
Wall Street doesn't see the government walking away from GM, Ford Motor (F, news, msgs) or Chrysler Group, however. GM and Ford shares were higher as a result.
At the close, the Dow Jones industrials were up 270 points, or 3.3%, to 8419. The Standard & Poor's 500 Index was up 33 points, or 4%, to 849, and the Nasdaq Composite Index added 52 points, or 3.7%, to 1,450.
The Dow had been up as much as 269 points in the morning and lost all of that gain by 2:30 p.m. ET. Then, the rally resumed with a great rush.
The rally recovered 39.7% of the 680 points that the Dow lost on Monday. But there's some worry that selling may erupt again Wednesday or later in a test of the lows the market saw on Nov. 21. Futures trading suggests U.S. stocks will open slightly lower.
Financial stocks led today's rally. The Select Sector SPDR-Financial (XLF, news, msgs) exchange-traded fund closed up 8.2% to $11.41; the ETF tracks the financial sector of the S&P 500.
Citigroup (C, news, msgs), which lost 22% on Monday, was up nearly 12% to $7.22. Bank of America (BAC, news, msgs) was up 11.8% to $14.37.
The day's big star was actually General Electric (GE, news, msgs), up 13.6% to $17.61, after saying it planned to maintain its AAA credit rating and its dividend at $1.24 a share in 2009. It also plans to scale back its GE Capital business and chop jobs. GE's gain was tops among the 30 Dow stocks and 20th best among S&P 500 stocks.
Twenty-eight of the 30 Dow stocks were higher today. The losers were Coca-Cola (KO, news, msgs), down 0.9% to $43.93, and 3M (MMM, news, msgs), down 2.4% to $60.86.
At the same time, 455 S&P 500 stocks were higher today, along with 91 Nasdaq-100 stocks.
On Monday, all 30 Dow stocks and all the Nasdaq-100 stocks were lower, along with 499 S&P 500 stocks.
The big problems for the automakers
While the market rally was welcome after Monday's drubbing, automakers made it abundantly clear that they face big problems.Start with sales.
Toyota (TM, news, msgs) said its U.S. sales fell 33.9% in November to 130,307 vehicles from a year ago, while Ford said its sales were off 30.6% to 123,222. Honda's (HMC, news, msgs) sales fell 32% from a year ago to 76,233.
GM stunned Wall Street when it said its November sales fell 41% to 154,877 cars and trucks. "Every manufacturer is posting awful numbers, and we are no exception," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing.
Toyota (TM, news, msgs) said its U.S. sales fell 33.9% in November to 130,307 vehicles from a year ago, while Ford said its sales were off 30.6% to 123,222. Honda's (HMC, news, msgs) sales fell 32% from a year ago to 76,233.
GM stunned Wall Street when it said its November sales fell 41% to 154,877 cars and trucks. "Every manufacturer is posting awful numbers, and we are no exception," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing.
Chrysler sales fell 47%.
GM's report precipitated a nasty selloff in its shares, which had been as high as $5.13 right after the open. It hit $4.25 shortly after 2 p.m. ET before rebounding to a 5.7% gain to $4.85.
Ford was up 5.9% to $2.70.
Next, look at the bailout prospects.
The automakers were told two weeks ago to specify why they needed $25 billion in government aid and how the companies would become profitable again.
They did -- but said they now need at least $34 billion. GM said it would need about $18 billion over the next few years. And it suggested its financial condition was so bad that it could run out of cash by the end of the year unless it got $4 billion now.
Ford said it didn't need money now but wanted $9 billion in bridge financing if necessary.
Chrysler said it needed $7 billion by Dec. 31.
GM's plans include substantially cutting back its money-losing North American operations, including closing 20% of its factories and cutting its U.S. work force to 65,000 to 75,000.
The company said it planned to focus on four core automotive brands -- Chevrolet, Cadillac, Buick and GMC -- and either sell, eliminate or consolidate the Saturn, Saab, Hummer and Pontiac brands.
Ford said it could see breaking even or turning a profit in 2011.
CEO Alan Mulally said he'll work for $1 a year if the company gets any government help. In 2007, he earned $2 million in salary, with a $7 million bonus, plus another $12.7 million in options, stock-based awards and other compensation.
Ford said it will cancel all management employees' 2009 bonuses and won't pay merit increases for its North American salaried employees next year. It also will sell its five corporate aircraft.
Mulally and GM CEO Rick Wagoner were driving the 10 hours from Detroit to Washington, D.C., in hybrid vehicles. They, along with Chrysler CEO Bob Nardelli, suffered a hailstorm of criticism for flying in separate private jets when they asked last month for $25 billion in aid from the government.
- Top Stocks blog: Is driving to Capitol Hill really necessary?
The automakers' pleas for help came as lawmakers have begun reaching out to legal and financial experts to explore how the government could help the companies prepare bankruptcy filings that would take them in and out of Chapter 11 protection quickly, The Wall Street Journal said late today. The pre-packaged bankruptcy would come with much of the financing and other restructuring measures worked out with creditors in advance.
Crude oil falls below $47
The stock market rally came as crude oil closed below $47 for the first time since May 2005.The price of gasoline nationally averaged $1.812 a gallon today, down 56% from highs seen in July.
The drop in gasoline prices appears to be making American drivers more willing to hit the road. Gasoline demand was up 1.7% last week, according to the weekly SpendingPulse report from MasterCard Advisors.
Energy stocks were higher but, as oil fell, the gains lagged the overall market. Exxon Mobil (XOM, news, msgs) was up 4.4% to $77.61. Chevron (CVX, news, msgs) added 4.9% to $75.54. But offshore driller Transocean (RIG, news, msgs) was off 4.3% to $55.38.
| Tues. | Mon. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Crude oil (NYMEX) (per barrel) | $46.96 | $49.28 | -$2.32 | -13.74% | -51.07% |
Heating oil (per gallon) | $1.5832 | $1.6151 | -$0.0319 | -5.41% | -40.24% |
Natural gas (per million BTU) | $6.4240 | $6.6040 | -$0.1800 | -1.32% | -14.15% |
Unleaded gasoline (per gallon) | $1.0583 | $1.1112 | -$0.0529 | -7.67% | -57.51% |
Techs stocks put in a rally
Tech stocks were mostly higher after getting clobbered on Monday.Personal computer maker Dell (DELL, news, msgs) was up 4.7% to $10.52, after CEO Michael Dell said that sales on Black Friday "look pretty good."
Shares of Yahoo (YHOO, news, msgs) were up 7.1% to $11.50 on reports that former AOL Chief Executive Jonathan Miller is trying to raise money -- perhaps as much as $28 billion to $30 billion -- to buy a portion or all of Yahoo, The Wall Street Journal reported.
Miller has been talking to private equity investors and sovereign wealth funds for months in hopes of raising money for a Yahoo deal. Miller believes he can do a deal that would be worth around $20 to $22 a share to Yahoo shareholders, The Journal said.
More work coming on GE Capital
General Electric said it will book restructuring charges of $1 billion to $1.4 billion as it reorganizes its finance arm, GE Capital, to help it to "better perform in the current economic environment."The conglomerate also ratcheted down its fourth-quarter forecast to 50 cents to 52 cents per share, the low end of its previously announced range of between 50 cents and 56 cents for the quarter.
Two weeks ago, GE said it will restructure GE Capital to save $2 billion and help eliminate its exposure to the financial turmoil that has slammed the division over the past year.
GE expects GE Capital to earn about $5 billion next year, down from this year's projected $9 billion, and to return to double-digit earnings growth in 2010.
GE also reiterated plans to pay a dividend of $1.24 per share in 2009.
"They are responding to the situation," Walter Hellwig, money manager at Morgan Asset Management, told Bloomberg Television. "That is positive."
More from MSN Money
Goldman could lose $2 billion
Goldman Sachs (GS, news, msgs) could report a loss of up to $2 billion for the fourth quarter, which ended Nov. 28, The Wall Street Journal reported.The company is reportedly facing write-downs on many of its assets and investments.
Stock Charts (Year)
Goldman Sachs
JPMorgan Chase
"The last two weeks have been nothing short of horrible, with asset prices coming under ever more pressure than before," Susan Katzke, an analyst at Credit Suisse, wrote in a note to clients Monday. Katzke lowered her fourth-quarter forecast to a loss of $4 per share, down from a previous estimate of profit of $2.47 per share.
Goldman shares fell 1.2% to $65. The stock has tumbled more than 70% over the past year.
Palm forecasts weak sales
Shares of Palm (PALM, news, msgs) were down 39% right after the open after the wireless device maker warned late Monday that it will miss its revenue forecast for the fiscal second quarter.Amazingly, however, the stock slowly moved higher and finished the day up 7.5% to $2.02.
Palm said it expects to earn between $190 million and $195 million in sales for the current quarter, well below the $349.6 million that Palm earned in the same period a year ago. Analysts had expected $330.8 million in revenue this quarter.
- Top Stocks blog: Can Palm survive?
"We are seeing unprecedented dynamics in the global markets as economic uncertainty hampers demand for consumer products," the company said in a statement.
Palm stock lost 21.3% in trading on Monday.
Andrew Rosenbaum contributed to this report.
| Tues. | Mon. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Treasurys | |||||
13-week Treasury bill | 0.050% | 0.010% | 0.040 | 150.00% | -98.41% |
5-year Treasury note yield | 1.672% | 1.723% | -0.051 | -13.99% | -51.61% |
10-year Treasury note yield | 2.693% | 2.719% | -0.026 | -8.93% | -33.26% |
30-year Treasury bond yield | 3.202% | 3.236% | -0.034 | -8.17% | -28.19% |
Currencies | |||||
U.S. Dollar Index | 86.820 | 86.900 | -0.080 | 0.13% | 13.20% |
British pound in dollars | $1.4908 | $1.4894 | 0.0013 | -3.10% | -25.06% |
Dollar in British pounds | £0.6708 | £0.6714 | -0.0006 | 3.20% | 33.44% |
Euro in dollars | $1.2710 | $1.2623 | 0.0087 | 0.13% | -13.04% |
Dollar in euros | € 0.7868 | € 0.7922 | -0.0054 | -0.13% | 15.00% |
Dollar in yen | 93.25 | 92.99 | 0.26 | -2.45% | -16.63% |
Canadian dollar in U.S. dollars | $0.799 | $0.802 | -$0.0038 | -1.17% | -19.58% |
U.S. dollar in Canadian dollars | $1.253 | $1.246 | $0.0067 | 1.18% | 24.35% |
Commodities | |||||
Gold | $783.30 | $776.80 | $6.50 | -4.36% | -6.53% |
Copper | $1.6005 | $1.6310 | -$0.03 | -2.97% | -47.37% |
Silver | $9.6150 | $9.3800 | $0.23 | -6.01% | -35.56% |
Corn | $3.3250 | $3.3275 | $0.00 | -4.86% | -27.00% |
Crude oil (NYMEX) (per barrel) | $46.96 | $49.28 | -$2.32 | -13.74% | -51.07% |
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