While futures are down 30 points as of 9 am ET, this is a big improvement over late last night, when futures were down 45 points.
With the failure to pass an auto loan bill, the Treasury Department is now essentially the "last line of defense" for the auto makers. They can now provide a bridge loan through the TARP, or provide or guarantee a debtor-in-possession facility to fund a pre-packaged Chapter 11 proceeding.
The AutoNation CEO, Milt Jackson, said on our airthat President Bush was likely to rescue the auto industry by agreeing to some kind of bridge loan until the next administration can enact a broader bill.
GM down 26 percent, Ford down 15 percent, Visteon down 7 percent. Lear down 25 percent, as they withdrew 2008 guidance.
1) Although the dollar is slightly weaker, commodities are down, and many commodity stocks are down 5 to 10 percent. Shipping stocks like DryShips (downgraded at Credit Suisse), Excel Maritime , and Diana Shipping are down 7 to 12 percent.
2) Financials are down 4 to 7 percent.
3) Caterpillar down 5 percent, downgraded to Sell at Goldman, citing weaker spending by commodity companies and a slowdown in the credit markets.
4) The other hot topic on the Street is the arrest of money manager Bernard Madoff. Madoff was widely known and respected, and during dinner last night with several well-known figures on the Street it was the main topic of discussion. He had a large investor base and the apparent fraud will hurt investor confidence in the high-end money management business. There are several well-heeled country clubs on Long Island that will be losing a large part of their members.
Update: Futures spiked shortly after 9 AM ET as President Bush said he was willing to consider use of TARP funds for a bridge loan to auto makers.
The cynical take on this on the NYSE floor was that Bush had signalled to the Senate Republicans YESTERDAY that he would use the TARP to provide a bridge loan to the auto makers if the Senate failed to pass the bill.
This signal provided the political coverage for the Republicans to talk tough to the unions.
So the Senate Republican leadership got to take a stand, and would not be blamed for an auto collapse because the President rides to the rescue.
CNBC's Names in the News:
Questions? Comments? email@example.com