Chief Executive Rick Wagoner warned that if the automakers failed "the societal costs would be catastrophic." He added "such a level of economic devastation would far exceed the government support that our industry needs." Ford CEO Alan Mulally, Chrysler LLC chief executive Robert Nardelli and UAW President Ron Gettelfinger also testified before the committee. The auto makers are seeking $25 billion in government aid to avoid bankruptcy.
On the other hand, Treasury Secretary Henry Paulson said in a testimony to the House Financial Services Committee “the rescue package was not intended to be an economic stimulus or an economic recovery package.” He said further that the Troubled Asset Relief Program “is not a panacea for all our economic difficulties.”
Shares of General Motors Corp. (NYSE: GM) subtracted 9 cents or 2.83% to finish at $3.09.Fored Motors (NYSE: F) decreased 4 cents or 2.33% to $1.68.
On the front of economic data, a release by Department of Labor on Tuesday showed Producer Price Index dropped a record 2.8% in October, exceeding consensus estimates of a decline of 1.8%. Core producer prices, which exclude food and energy, rose 0.4% in October, matching estimates.
A report by National Association of Home Builders showed that the monthly market index gauge of home builders slumped five points to 9, the lowest since record began in 1985.
According to the British Bankers' Association, the London interbank offered rate, or LIBOR, that banks charge each other for three- month loans fell two basis points to 2.22% on Tuesday. The overnight rate was steady at 0.40%. The Libor-OIS spread climbed marginally to 1.76 from 1.75.
European stocks posted a decent recovery from session's lows and managed to settle in green. The U.K. FTSE climbed 76.39 points or 1.85% to 4,208.55. The German DAX and French CAC advanced 0.49% and 1.12% respectively.
Asian stocks slumped on Tuesday. The Nikkei 225 finished at 8,328.41, down 194.17 points or 2.28%. Hong Kong's Hang Seng Index fell 613.64 points or 4.54% to 12,915.89.
NYMEX Crude oil for December delivery fell 56 cents, or 1%, to settle at $54.39 a barrel.
Disclosure: Author does not own any of the stocks discussed here.
