Bulls Pull Out a Modest Win

"The problem is that when a company goes into chapter 11, they have an interim financing need and they come out better, but because of the lack of debt financing the automakers could go from chapter 11 to chapter 7," says Smith.

"The $15 billion doesn't sound like much money compared to what's been thrown at the other bailouts, but the ramifications of the autos industry failing could be very profound, and it could have real third-party consequences," says ING's Gendreau.

By the end of Wednesday's trading, Ford gained 2 cents to $3.25, and GM finished down 10 cents at $4.60.

In economic data, the Commerce Department reported a 1.1% decline in wholesale inventories in October, wider than the 0.2% cutback predicted by economists and the biggest inventory decline by wholesalers since November 2001.

According to the Mortgage Bankers Association, the Market Composite Index, a measure of mortgage loan application volume, was 796.8 in the week ended Dec. 5, a decrease of 7.1% on a seasonally adjusted basis from 857.7 one week earlier. The refinance share of mortgage activity is now 73.7% of total applications, up from 69.1% the previous week. Meanwhile, credit watch agency TransUnion reported that average bank credit card debt in the third quarter increased nearly 1.6% over the second quarter and 6% from the third quarter of 2007 nationwide.

In company news, insurance behemoth America International Group (AIG) owes Wall Street firms as much as $10 billion for speculative trades that went south, according to a report in The Wall Street Journal. The trades, which the company argues are "credit protection instruments", were not previously detailed, and thus the losses aren't covered in the government's $150 billion bailout package. It remains to be seen how AIG plans to pay them off. AIG's shares gave up 9.3% to $1.75 Wednesday.