NEW YORK (AP) — Wall Street grew more optimistic Wednesday that Congress will approve a $15 billion bailout for U.S. automakers, a move aimed at saving jobs and preventing another sharp downdraft in the economy.
Stock futures moved higher before the opening bell as lawmakers agreed in principle on aid that would speed loans to Detroit's struggling car companies and have a "car czar" named by President Bush to oversee an overhaul of the auto industry. Congress could vote on the plan as early as Wednesday and the money could be disbursed within days.
However, the deal might still run into some headwinds as Republicans raised deep concerns about the bailout. The White House-negotiated plan is being opposed by a group of conservatives led by Sen. John Ensign, R-Nev., who threaten to block the measure.
The plan would provide relief for General Motors Corp. and Chrysler LLC. However, Ford Motor Co. Chief Executive Alan Mulally and Executive Chairman Bill Ford Jr. told The Associated Press Tuesday they don't need to take the bailout, and can restructure with new product plans.
Optimism that a plan will soon be in place lifted Dow Jones industrial average futures 78, or 0.87 percent, to 8,796. Standard & Poor's 500 index futures added 7, or 0.79 percent, to 896.00. Nasdaq 100 futures rose 8.25, or 0.68 percent, to 1,225.25.
On Tuesday, the Dow shed 243 points as investors after disappointing corporate news reminded investors of the magnitude of the economy's troubles. Stocks have rallied for two sessions before the decline.
The market's run during the past several weeks has encouraged some on Wall Street that stocks might be carving out a sustainable recovery. Since reaching multiyear trading lows on Nov. 20, the Dow has risen 15 percent and the broader S&P 500 has risen 18.1 percent, while the Nasdaq is up 17.6 percent, even with Tuesday's decline.
Bond prices were mixed in early trading. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.70 percent from 2.65 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.02 percent, from 0.03 percent late Tuesday. Still, the low yields indicate a high degree of investor unease.
The dollar was mixed against most other major currencies, while gold prices slipped.
In economic news, the Commerce Department is scheduled to issue data at 10 a.m. EST on wholesale inventories. The report is expected to show that inventories kept falling in October as businesses tried to cut back in the face of a rapidly weakening economy; Wall Street economists surveyed by Thomson Reuters forecast that inventories dropped 0.2 percent. That would be double the 0.1 percent drop recorded in September.
Corporate news will also be in focus during the session.
GMAC Financial Services said it hasn't raised enough capital to become a bank holding company and be eligible for aid under the government's $700 billion bank rescue plan. The New York-based financer needs to have a minimum amount of total regulatory capital of $30 billion to become a bank holding company.
One of Yahoo Inc.'s biggest shareholders issued an open letter to the Internet company's board urging a deal with Microsoft Inc. be salvaged. Ivory Investment Management LP, which owns a 1.5 percent stake in Yahoo, said the company should sell its search engine business to Microsoft that could deliver shareholders between $24 and $29 a share.
A spokesman for Yahoo could not immediately reached for comment.
American International Group Inc. owes Wall Street investment banks about $10 billion for speculative trades that went bad, according to The Wall Street Journal. The debt exemplifies the challenges the insurer faces as it seeks to recover under a U.S. government rescue, the Journal reported, speaking to people familiar with the matter.
Rio Tinto Group said Wednesday it will cut 14,000 jobs worldwide and reduce capital investment as part of new measures to reduce its debt amid waning demand for iron ore and other metals.
Oil prices rose above $44 a barrel as investors looked to an expected OPEC production cut next week, a moved aimed at helping to stabilize prices that have plummeted amid a global economic slowdown. Light, sweet crude rose $2.02 to $44.09 a barrel in electronic trading on the New York Mercantile Exchange.
Stock markets were mixed overseas. Hong Kong's Hang Seng index closed up 5.59 percent, while Japan's Nikkei 225 added 3.15 percent. European bourses were mixed, with Britain's FTSE-100 fell 0.41 percent, Germany's DAX adding 0.20 percent, and France's CAC-40 down 0.04 percent.
