The markets were closed Monday in observance of Memorial Day.
TuesdayAnother busy week of auto maker news kicked off Tuesday. Union officials from the United Auto Workers representing workers at GM (GM) met in Detroit to begin approving deal to cut labor costs. This contract would change the terms of payment owed to a UAW trust fund. This is one of the things that stand in the way of GM reaching its June 1 deadline to restructure.
Two reports were released Tuesday morning, one on home prices and the other on consumer confidence. Home prices, according to the Standard & Poor’s/Case-Shiller Home Price Indices, fell 18.7% in March, compared to a year earlier. But consumer confidence made a surprise jump thanks to a brighter outlook on employment. The index blew past economists’ expectations of 43, hitting 54.9 in May. This is up from 40.8 in April.
President Obama nominated federal appeals court Judge Sonia Sotomayor to the Supreme Court Tuesday. If approved by the Senate, she will be the first female Hispanic Justice on the High Court. Some critics worry, however, that she will be anti-business, citing her record on some high-profile cases.
And ending a four-day losing streak, the Dow jumped 200 points on that consumer confidence report, hitting the highest level since last September. The average closed at 8173.
Obama's Supreme Court Nominee
Cavuto: Sotomayor a Game Changer
Ron Paul Scared of Government
Cavuto’s Capper: Life’s Getting out of Hand
Wednesday
Nationwide Average
$2.47 a gallon
The Wall Street Journal’s All Things Digital Conference, D7, was under way in California Wednesday, featuring interviews with some of the biggest names in technology, software, and the Internet. Hosted by Walt Mossberg and Kara Swisher of the Journal, some of the speakers on Wednesday included Twitter founders Biz Stone and Evan Williams and Yahoo (YHOO) CEO Carol Bartz.
But the focus on Wednesday remained on the auto makers. Chrysler CEO Bob Nardelli sent an email out to his employees saying the company is very close to forming its alliance with Fiat. He told them the auto maker was at its last step in this process.
Chrysler’s very sale to Fiat cleared some legal hurdles as well. A bankruptcy judge overseeing the company’s restructuring denied creditors a motion that would have delayed the sale. Three pension funds in Indiana that hold Chrysler bonds said their rights were violated when the Obama Administration offered better restructuring terms to the UAW union. And 300 Chrysler dealerships also attempted to put of the sale. They felt they were given an unfair deal.
Meanwhile, GM moved closer to bankruptcy as its bondholders rejected its offer of a 10% stake in the company if they waived their claims for the $27 billion they’re owed. The bondholders felt this was too small an amount compared to the amount that GM owes them.
Government May Own Up to 70% of New GM
Survey: Recession to End By 4Q of ‘09
Cavuto’s Deal: I Told You So
Cavuto’s Capper: Sales Taxes
Thursday
The All Things Digital conference continued on its last day Thursday, with big speakers including CEO Steve Ballmer from Microsoft (MSFT) and Palm’s (PALM) executive chairman, Jon Rubinstein. Ballmer introduced the company’s new re-branded search engine, Bing, while Rubinstein demonstrated the upcoming Palm Pre handheld.
Spin-off Department: Time Warner (TWX) released plans to spin AOL off into an independent company. AOL has been one of its weakest divisions and Time Warner wants to focus more on its core businesses, including Warner Bros., Time, and Turner Broadcasting Systems.
Meanwhile, Washington was considering creating a new regulator position that would oversee banking. A staff memo on said the Obama Administration is going to propose an idea that the Federal Reserve have a risk regulator.
General Motors offered bondholders a new offer, after the previous one was rejected. The new offer would give creditors a bigger stake in the new company that forms after restructuring.
Murdoch: Auto Unions Getting a Free Pass
Murdoch on the Future of Newspapers
Cavuto’s Deal: A Deal They Can’t Refuse
Cavuto’s Capper: Mortgage Heaven
Friday
This was a big week of news for GM and Friday was no exception. The auto maker, FOX Business confirmed, will be filing for bankruptcy on Monday. This will come after President Obama outlines how his Administration will be overseeing GM’s restructuring.
Meanwhile, UAW President Ron Gettelfinger said the members of the union have approved the GM contract. 74% of UAW members ratified the agreement, which will affect 54,000 workers. The support of the union is expected to make it easier for the auto maker to restructure during bankruptcy.
And ending May on a positive note, the Dow jumped 97 points, closing at 8500 Friday afternoon. This was the best three-month rally in more than 10 years, though the average has a long way to go before reaching its record high again.
All That Glitters Is Gold
GM to File for Bankruptcy
Fed Works to Keep Rates Down
Arctic May Hold More Undiscovered Oil
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