NEW YORK (Reuters) - The S&P 500 and Nasdaq rose on Friday after the U.S. government said it would throw a $17.4 billion lifeline to automakers grappling with falling consumer demand.
But the Dow ended lower, pulled down by another fall in energy shares, including Chevron (CVX.N) and Exxon Mobil (XOM.N) as oil sank for the sixth day in a row on fears the anemic economy will swamp demand.
"It's relief for the markets," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York, in reference to the auto sector's bailout. "There was a feeling it was on the way. It is being dealt with and not in a way that opens up the pocketbook and says, 'Take what you need.'"
Initial optimism over the government's bridge loan to the automakers, which sent stocks up as much as 2 percent, faded as investors digested terms of the bailout that give them a relatively short period of time to repair their problems.
The Dow Jones industrial average .DJI slipped 25.88 points, or 0.30 percent, to end at 8,579.11. But the Standard & Poor's 500 Index .SPX rose 2.60 points, or 0.29 percent, to 887.88. And the Nasdaq Composite Index .IXIC added 11.95 points, or 0.77 percent, to close at 1,564.32.
Over the last three days, the Dow has fallen 3.9 percent. For the month so far, the Dow is down 2.8 percent.
For the week, the Dow fell 0.7 percent, while the S&P 500 rose 0.8 percent and the Nasdaq gained 1.5 percent.
The Nasdaq was the best-performing index, after Oracle Corp (ORCL.O) and Research in Motion (RIM.TO) Friday marked the end of the convergence known as quadruple witching, in which settlement and expiration of four different types of futures and options contracts happen in a two-day period. This can add to volatility, but on Friday, that was not the case. The Chicago Board Options Exchange Volatility Index, or VIX .VIX, which also is Wall Street's favorite fear gauge, fell 5.09 percent to end at 44.93.
In the energy sector, Exxon Mobil slumped 2.6 percent to $75.02, while Chevron fell 3 percent to $70.85. Oil fell to $33.87 a barrel, its lowest settlement since February 10, 2004.
Retailers' shares also weighed on the market, as the S&P Retailers Index .RLX fell 1.1 percent while heavy snow and inclement weather across large parts of the United States threatened to damage sales during the last weekend of what is expected to be a weak holiday shopping season.
A drop in retailers' stocks, including Target (TGT.N) and JC Penney Co Inc (JCP.N), helped curtail the S&P's earlier gains.
Target's stock slid 2.8 percent to $34.42 and JC Penney shares lost 4 percent to $19.92, both on the New York Stock Exchange.
Shares of General Motors Corp (GM.N) surged nearly 23 percent to $4.49 after U.S. President George W. Bush said it would be irresponsible to let the companies go bankrupt in a time of economic crisis.
Investors had fretted about the wide-reaching ramifications of a potential failure of one of Detroit's big automakers. The government loans would be called back if they cannot restructure enough to ensure their survival. Continued...
