Wall Street Holds to Gains

The Census Bureau's wholesale inventories report for September showed a decline of 0.1%, down from a 0.6% increase in August but below the consensus forecast of a 0.3% uptick. The National Association of Realtors' pending home sales index declined 4.6%, a heftier loss than the 3.4% anticipated by analysts.

President-elect Barack Obama held an afternoon news conference to discuss the state of the economy. He called for development of a fiscal stimulus plan, an extension of jobless benefits to the unemployed and additional help for the automakers, whose quarterly earnings statements showed an industry in disrepair.

Ford (F Quote) said Friday it lost $129 million for the third quarter and burned $7.7 million in cash and said it would cut additional jobs.

General Motors (GM Quote) shares stopped trading ahead of the company's earnings release. GM then announced a loss that was much heavier than anticipated and reported $6.9 billion in negative cash flow for the quarter. It warned that capital levels would fall short of levels necessary to sustain operations unless economic conditions improve substantially and said that it had set aside merger plans to focus on boosting its liquidity.

Paul Nolte, director of investments at Hinsdale Associates, said that GM's loss wasn't much of a surprise. With auto sales at current levels, he said, "We'll probably lose one of the big three within the next year. ... We could lose two."

Nolte said that GM isn't getting killed so much by its auto business as by its financing arm. "They've gotten well away from the basic business and they've been caught in an economy that's turned away from both sides."