Stocks End Mixed After Chrysler Bankruptcy News

By MADLEN READ
|  Thursday, Apr 30, 2009  |  Updated 5:18 PM EDT
View Comments (
)
|
Email
|
Print
Blame Them For Your Empty Wallet

AP

According to preliminary calculations, the Dow fell 17.61 points, or 0.2 percent, at 8,168.12, after rallying 121 points in early trading.

Photos and Videos
More Photos and Videos

Chrysler's bankruptcy put only a small dent in Wall Street's rally.

The Dow Jones industrial average gave up early gains and ended about 17 points lower on Thursday after President Barack Obama confirmed that Chrysler LLC will be going through a bankruptcy reorganization.

According to preliminary calculations, the Dow fell 17.61 points, or 0.2 percent, at 8,168.12, after rallying 121 points in early trading.

Broader stock indicators were mixed. The Standard & Poor's 500 index fell 0.83, or 0.1 percent, to 872.81, while the Nasdaq composite index rose 5.36, or 0.3 percent, to 1,717.30.

The Russell 2000 index of smaller companies fell 3.91, or 0.8 percent, to 487.56.

The announcement was not surprising to investors, though, and the Dow still capped the month of April with a robust gain of 7.4 percent.

"We've had an astoundingly powerful rally in the face of what's been some pretty serious roadblocks," said Jack A. Ablin, chief investment officer at Harris Private Bank, pointing to the swine flu, the government's stress testing of banks, and now, a U.S. automaker bankruptcy.

Wall Street has been growing more confident that the nation's economy, while not yet healthy, is nearing a bottom. The Dow is already up 25 percent from its 12-year low in early March. That optimism was stoked by calming words about the economy from the Federal Reserve on Wednesday, and a government report Thursday showing a decline in last week's jobless claims.

The Russell 2000 index of smaller companies fell 3.91, or 0.8 percent, to 487.56.

About nine stocks rose for every seven that fell on the New York Stock Exchange, where volume came to 1.74 billion shares.

Chrysler filed for bankruptcy protection Thursday and said it will temporarily halt most of its vehicle production while it completes a deal to join forces with Italian carmaker Fiat. The nation's third-largest automaker was sent to bankruptcy court after a holdout group of creditors refused to budge on proposals to reduce Chrysler's $6.9 billion in secured debt.

The Dow's biggest loser on Thursday was JPMorgan Chase & Co., a Chrysler bond holder. General Motors Corp., another troubled automaker and a Dow component, finished higher despite the Chrysler news.

Another Dow component that lost ground Thursday was Exxon Mobil Corp. The oil company's first-quarter profit fell 58 percent from a year ago to the lowest level in more than five years.

The Fed said Wednesday the pace of the economy's contraction appears to be slowing, and Thursday's economic news mostly supported that view.

Chicago Purchasing Managers' index, which measures business conditions across Illinois, Michigan and Indiana, jumped to 40.1 in April from 31.4 in March. The index is considered a precursor to the Institute for Supply Management's manufacturing index, which is due Friday.

The government said initial claims for jobless benefits fell last week by 14,000 to 631,000. Economists had predicted an increase.

Continuing jobless claims jumped to a new record, however, and the government also reported a slightly larger-than-expected decline in personal spending and incomes.

And despite burgeoning confidence about the economy, worries about the instability of banks still dog investors. At Bank of America Corp.'s annual shareholders meeting Wednesday, shareholders stripped CEO Ken Lewis of his chairman role. Many of the shareholders who spoke at the meeting complained about the bank's purchase of the troubled investment bank Merrill Lynch.

Government bonds were narrowly mixed. The yield on the 10-year Treasury note rose to 3.12 percent from 3.11 percent late Wednesday.

The dollar was mixed against other major currencies. Gold prices fell.

Light, sweet crude rose 15 cents to $51.12 a barrel on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average jumped 3.9 percent. Britain's FTSE 100 rose 1.3 percent, Germany's DAX index rose 1.4 percent and France's CAC-40 rose 1.4 percent.

Get the latest headlines sent to your inbox!
View Comments (
)
|
Email
|
Print
Leave Comments
What's New
21st Century Solutions
The NBCUniversal Foundation is partnering... Read more
Follow Us
Sign up to receive news and updates that matter to you.
Send Us Your Story Tips
Check Out