Stocks rise in early going
Wall Street gains after government's $6 billion move aimed at helping General Motors.
NEW YORK (CNNMoney.com) -- Stocks gained Tuesday morning as investors welcomed the government's decision to pour $6 billion into GMAC, the financing arm of struggling automaker General Motors.
The Dow Jones industrial average (INDU), the Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all rose in the early going.
The government announced late Monday that it will pump $6 billion into GMAC Financial Services, a financing company critical to the survival of General Motors (GM, Fortune 500). (Full story)
The move deepens the federal government's bailout of the troubled auto industry. Less than two weeks ago, President Bush announced a $17.4 billion rescue package to prevent the collapses of GM and privately held Chrysler LLC.
Shares of GM rose 8% in the morning. Ford Motor Co. (F, Fortune 500), which is not receiving bailout funds but is also struggling, rose 2%.
Consumer confidence: The Conference Board is set to release its December index of consumer confidence at 10 a.m. ET. Economists surveyed by Briefing.com expected to rise to a reading of 45.2 from 44.9 in November. That would still be at the low end of the index on a historic basis, which reached an all-time low of 38.3 in October.
IndyMac sale pending: Investors also await word on a sale of one of the nation's largest failed banks.
IndyMac Bank, which was taken over by the Federal Deposit Insurance Corp. after it collapsed in July under the weight of risky mortgages, is set to be bought by a group of private equity and hedge fund firms, according to a source familiar with the situation. The FDIC has said it expects a deal to be announced by year-end.
Markets: Tuesday's session was expected to be lightly traded, with many market participants on vacation, celebrating the year-end holidays. The markets will be closed Thursday for New Year's Day.
Stocks fell Monday as tensions in Gaza sent oil soaring more than 6%. Markets also reacted negatively to the news that Dow Chemical (DOW, Fortune 500) failed to close a major deal with Kuwait's state-run petrochemical company, raising doubts about Dow's ability to repay some $13 billion in debt it will take on once its acquisition of rival Rohm & Haas (ROH, Fortune 500) closes early next year.
European markets were higher in morning trading, led by a 2.2% gain in the German DAX. Asian stocks ended mixed, with Tokyo's Nikkei index finishing the trading year with a gain of 1.3%.
Despite Tuesday's moderate gain, the Nikkei ended the year down 42.9% - the worst year ever for the 58-year old Japanese benchmark index. The previous low had been 1990, when the Nikkei fell 38.7% amid a staggering housing-market decline.
Oil slipped 66 cents to $39.36 a barrel in electronic trading.
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