Empresas y finanzas

Wall Street climbs on extended auto bailout, tech companies

By Chuck Mikolajczak

NEW YORK (Reuters) - Stocks climbed on Tuesday after the government expanded its bailout of the auto industry, bolstering hopes that lawmakers would continue to take steps to minimize the severity of the year-long recession.

The Bush Administration said late Monday it would extend an additional $1 billion loan to General Motors Corp and take a $5 billion stake in the automaker's financing arm, GMAC, in the latest move to ease the credit crisis. On Tuesday, GMAC announced easier financing terms for car and truck buyers and GM announced zero percent financing for some vehicles, which could help bolster sales.

GM shares jumped 4.7 percent and rival Ford Motor Corp rose 1.4 percent.

"The GMAC news is the driver of the lot." said Steve Sachs director of trading at Rydex Investments, Rockville, Maryland. "The government has been telling us for months that they will do whatever it takes and there is probably more of it in store as we get to the inauguration and a few weeks past that."

The Dow Jones industrial average <.DJI> was up 107.52 points, or 1.27 percent, at 8,591.45. The Standard & Poor's 500 Index <.SPX> was up 11.82 points, or 1.36 percent, at 881.24. The Nasdaq Composite Index <.IXIC> was up 24.08 points, or 1.59 percent, at 1,534.40.

The Nasdaq was boosted by shares of big-cap technology companies that have larger cash reserves and are seen as better positioned to withstand the economic slump.

Shares of Qualcomm Inc , the wireless chip maker, rose 1.6 percent to $34.63, while software maker Oracle Corp gained 2.9 percent to $17.71, putting them among the top boosts on the Nasdaq. International Business Machines Corp was the leading advancer on the Dow, rising nearly 2 percent to $82.85.

Investors shrugged off another round of economic reports that pointed to a deepening recession. Prices of single-family homes plunged a record 18 percent in October, while consumer confidence also fell to a record low.

Stocks have had difficulty mounting a significant year-end rally. The broad S&P 500 is down 40 percent for 2008, making it one of the worst years ever.

In an effort to stem the tide of the recession, U.S. lawmakers have extended aid to a slew of companies, most recently to automakers GM and privately held Chrysler LLC.

Earlier this month, the government agreed to extend a $17.5 billion lifeline to the two automakers in an attempt to prevent their potential collapse which could have led to hundreds of thousands of jobs lost and further weakened the economy.

GM rose 4.7 percent to $3.77, while Ford added 1.4 percent to $2.256.

Rohm & Haas jumped 11.9 percent to $59.69 after the Financial Times reported Dow Chemical could tap a $13 billion bridge loan or renegotiate the price to salvage its $15 billion takeover of the company.

The deal was jeopardized after Kuwait decided to scrap a joint venture with Dow Chemical over the weekend, depriving Dow Chemical of financing it planned to use for the acquisition. Dow edged up 0.5 percent to $15.40.

(Editing by Leslie Adler)

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