Stocks Open Higher on Expanded Auto Industry Bailout
The Treasury said it would buy $5 billion in senior preferred equity from GMAC and increase its loan to General Motors by $1 billion. The Dow rose 43 points to 8527 while Nasdaq climbed 11 points to 1522.
On the upside
Total assistance going to the auto industry rose to $23.4 billion after GMAC's application to become a bank holding company was approved by the Federal Reserve making the company eligible for financial rescue funds. Shares of General Motors (NYSE: GM) rose.Shares of Rohm Haas (NYSE: ROH) partially recovered from yesterday's offer as Dow Chemical (NYSE: DOW) considered a bridge loan to salvage its acquisition bid for the chemical company.
Standard & Poor's said it would replace UST Inc. (NYSE: UST) which is being acquired by Altria Group (NYSE: MO) with Iron Mountain (NYSE: IRM) in its S&P 500 index.
Savient Pharmaceuticals (Nasdaq: SVNT) received fast-track approval from the FDA for its drug treatment of gout.
On the downside
Investment banker Greenhill and Company (NYSE: GHL) was downgraded by an analyst.
In the broad market, advancing issues outpaced decliners by a margin of more than 2 to 1 on the NYSE and by more than 5 to 3 on Nasdaq. The Russell 2000 which tracks small cap stocks added 4 points to 470.
