The market found its legs again Tuesday after falling more than 600 points on Monday. One driver (so to speak) that pushed the Dow to a positive close was the automotive stocks led by Ford Motor Co. and General Motors Corp. The two rebounded on news the Big Three are turning in specific business plans to gain approval on billions of dollars in government aid. Overall, the Dow finished up 270, or 3.31%, at 8,419.09, and the Nasdaq closed up 51.73, or 3.70%, at 1,449.80.
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Investors overlooked Ford's 31% fall in monthly sales, instead only paying attention to the news that the company submitted its plan for federal aid, saying it will return to profitability by 2011. Ford said it doesn't expect a liquidity crisis in 2009, but it plans to right its ship by calling for an investment of about $14 billion in advanced technologies and products to improve fuel efficiency over the next seven years.
Meanwhile, Ford's more desperate cousin GM is submitting its plan after market close. The picture looked darker for GM as it said November light vehicle sales slumped 41.3%. Despite the sales figures, news of a revised plan likely excited investors pushing the stock up. The Wall Street Journal reported that GM's plan will likely concentrate on paring down its heavy debt load and
consolidate or sell at least one of its eight auto brands, most likely
Saab. - Gerald Magpily
