Updated from 7:55 a.m. EDT

(At 4:20 p.m. EDT)

Automaker News Never Ends

Were you overwhelmed by news on the auto sector today? Me too. Between the Chrysler bankruptcy protection announcement, the speculation over General Motors' ( GM) future, and word that automakers may be granted TARP access, it was a whirlwind day for the sector.

Unfortunately, it looks like the automakers will make headlines again Friday, as the monthly auto sales data for April will be released. In addition to Chrysler and GM, Ford ( F) and Toyota ( TM) will post monthly results.

If we're lucky, AutoNation ( AN) CEO Mike Jackson might make yet another appearance on CNBC. Only if we're lucky.

In its Thursday preview for April auto sales, Edmunds.com said the data may show that the auto industry in the U.S. is "picking up much-needed momentum."

April new-vehicle sales, including fleet sales, are expected to be 859,000 units, a 30.8% decrease from last April, Edmunds.com said, but a 0.5% increase sequentially.

Friday's Earnings & Economic Calendar

Friday will bring an end to a very busy earnings week for S&P 500 constituents. Chevron ( CVX), MasterCard ( MA), Clorox ( CL) and Dean Foods ( DF), among others, will report before Friday's opening bell.

Traders will also be sifting through earnings reports delivered after Thursday's closing bell, including Hartford Financial ( HIG), Monster Worldwide ( MWW) and DryShips ( DRYS), among others.

The economic calendar is equally packed, with reports on factory orders from March, the Institute for Supply Management's manufacturing index for April, and the University of Michigan's revised read on consumer sentiment for April all set to land.

(At 7:45 a.m. EDT)

Automakers Continue Bankruptcy Dance

There is a very real possibility that Chrysler may enter bankruptcy protection by the end of the day.

A report in The Wall Street Journal Thursday said that talks between the Treasury Department and lenders to keep Chrysler out of bankruptcy broke down late Wednesday, making it all but certain the company will file for Chapter 11 protection later today. The report cited people familiar with the discussions.

Chrysler faces a government deadline Thursday to drastically reduce its labor costs, slash its debt load and find a partner.

In a separate report, the Journal said bondholders of General Motors ( GM) are readying a counteroffer that will ask GM to issue new stock and give 51% of the reorganized company to the bondholders, a 41% stake to the United Auto Workers union and 1% to common equity holders.

Previously, the bondholder committee rejected GM's offer made earlier this week that asked bondholders to swap all their claims for a 10% stake in a reorganized company. GM shares were lately up nearly 4% to $1.88.

Meanwhile, CNBC reported late Wednesday that Treasury Secretary Timothy Geithner plans to make automakers will be eligible for funds from the Troubled Asset Relief Program. In a letter to Senate Finance Chairman Max Baucus, Geithner said that "debt obligations issued by companies engaged in the manufacturing of automotive vehicles" can be purchased using TARP funds "to promote financial market stability."

The letter did not specifically name any automaker, CNBC said.

Lewis Ousted From Chair

Late Wednesday, news broke that Bank of America ( BAC) CEO Ken Lewis was stripped of his chairman title, losing by a narrow margin in the shareholder vote. Director Walter Massey was chosen to replace Lewis as chairman, though Lewis will maintain his positions as president and CEO, the company said.

BofA shares were up 5.7% in the premarket session.

Freddie Mac Probed on Losses

The Journal reported that Freddie Mac ( FRE) is under investigation by the FBI on possible accounting violations that enabled Freddie to defer billions of dollars of losses incurred from 2001 through 2004 on derivative contracts whose value depends on fluctuations in interest rates.

The losses, currently about $3.7 billion, are due to be gradually recognized in quarterly earnings statements over the next several years, the Journal noted. The stock was down nearly 1% early Thursday.

100+ Applications for PPIP

The Treasury Department said Wednesday that is has received more than 100 applications from potential fund managers interested in participating in the Legacy Securities portion of the Public Private Investment Program, or PPIP.

A variety of institutions applied, including traditional fixed income, real estate, and alternative asset managers, the Treasury said. At least five will get preliminary approval by May 15, and once a fund receives preliminary qualification, it can begin raising the minimum of $500 million in private capital that will serve as the investment that, pending further approval, will be matched with taxpayer funds.

Apple Builds Up a Chip Core

The Wall Street Journal reported Thursday that Apple ( AAPL) is working to design its own computer chips in hopes of keeping information on exclusive features for its products shielded from its rivals.

The Journal said Apple has been hiring people from many different segments of the semiconductor industry, including engineers to create multifunction chips that are used in handsets devices to run software and carry out other chores. Apple shares were up 1% in premarket trading.

Earnings Roundup

Procter & Gamble ( PG) reported fiscal third-quarter earnings of 84 cents a share, which topped Wall Street's estimates and was toward the high end of its own internal guidance. Sales fell 8% from a year ago to $18.42 billion. Analysts expected Procter & Gamble to post a profit of 80 cents a share on revenue of $18.91 billion, according to Thomson Reuters.

Dow Chemical ( DOW) said first-quarter earnings fell 97% from a year ago to 3 cents a share, and sales in the quarter dropped 39% from last year to $9.1 billion. Excluding items, Dow Chemical recorded a profit of 12 cents a share. Analysts were looking for a quarterly loss of 21 cents a share on sales of $11.69 billion.

Ericsson ( ERIC) said first-quarter profit fell 35% to 1.72 billion kronor ($216 million) from 2.64 billion kronor a year earlier as demand for handsets declined. Ericsson said revenue rose 12% from a year ago to 49.6 billion kronor.

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