GMAC, which is the lending arm of General Motors and makes auto, home and commercial real estate loans, will get $6 billion from the Treasury Department. Stocks are rallying today on the news, since it will help the firm continue giving auto loans to car buyers. This follows the $13.4 billion Treasury already agreed to give GM and Chrysler earlier in December. Here’s some details from WSJ:
Veteran traders and analysts are skeptical that the steps announced so far will be enough to ensure the auto makers’ long-term financial stability or to prompt vital strategic changes.
Other auto-related names rallied on Tuesday. Ford Motor gained 2.3% to $2.27. American Axle & Manufacturing Holdings, a key supplier for the auto industry, was up more than 3%.
The S&P 500 was up 1.4% in recent action, trading at 881.50. All its sectors were higher, led by industrials, up almost 3% as a group. The Nasdaq Composite Index rose 2.1% to 1541.48. The Russell 2000 rose 1.9% to 474.97.