Stocks Find Positive Footing

Updated from 11:02 a.m. EST

Stocks in New York were rising from early lows to turn positive Wednesday, as traders eyed the prospect of a bailout for the automakers and appeared to shrug off several disheartening economic reports.

The Dow Jones Industrial Average, down some 184 points earlier, was lately adding 45 points at 8464, and the S&P 500 was gaining 7 points to 855. The Nasdaq tacked on 18 points to 1467.

Traders were closely watching the automotive sector as the Big Three U.S. car manufacturers continued to petition Congress for emergency funds. Ford (F Quote) and General Motors (GM Quote) on Tuesday had presented business plans to Congress in hopes of garnering a federal bailout. General Motors asked for $12 billion in low-interest financing and a $6 billion line of credit, and Ford requested $9 billion in government aid.

GM and Chrysler also said they would need $4 billion and $7 billion respectively just to make it to the end of 2008.

Marc Pado, U.S. strategist for Cantor Fitzgerald, said that because it is so difficult to raise money in the open market, the government needs to help the automakers. He also stressed that the deal before Congress is not a bailout, but rather a bridge loan that is a vital prop to the fragile economy. "If you do not want to see 10% unemployment, you need to act on GM and Ford and Chrysler," he said.

Toyota (TM Quote), meanwhile, announced it would cut production in December and reduce managers' winter bonuses as it copes with the economic downturn.