Updated from 1:44 p.m. EDT
Mondays Are for Rallies( At 5:30 p.m. EDT) If I had told you six months that GM ( GM) would file for bankruptcy and the Dow Jones Industrial Average would gain more than 200 points, I don't think you would have believed me. That's what happened though. The DJIA started the week with a rally, rising 221.11 points, or 2.6%, to 8721.44 and climbing for the third consecutive session. As a result, the index had its best close since Jan. 8. Of the 30 stocks, 21 were up, eight fell and the aforementioned GM, whose days are basically done on both the Dow and the New York Stock Exchange, for now at least, was unchanged at 75 cents. The best percentage gainers were Alcoa ( AA) and Boeing ( BA), each up more than 6%, while Pfizer ( PFE) and JPMorgan Chase ( JPM), which is raising capital, had the steepest declines, falling 2.8% and 2.1%, respectively. Citigroup ( C), another stock being removed from the Dow, closed the first day of its last week on the measure by slipping 3 cents to $3.69. Thanks to the fact that the industrials have advanced 33% since their 12-year low in March, they're almost back to break-even for the year and are now off just 0.6%.
Let's Hope Things Get Better( At 1:10 p.m. EDT) Thousands upon thousands of jobs lost. Plant after plant closed. One model after another gone. Staggering amounts of debt that can't be repaid. Tens of billions of dollars of losses on the bottom line. This is the story of GM ( GM) in the 21st century. Now that the company is officially in bankruptcy, we've received assurances that things are going to be better. Just give them a little while. Sure. This was only the biggest automaker in the world, and now it's on its way to being what, No. 8 or 17 or so? Let's celebrate.
I wish I could cheer the sad story of GM and embrace the leaner, more efficient and competitive future. Maybe I should be more like Wall Street. Really bothered by it, you know? You can tell, what with the Dow being up more than 200 points. GM, which has only a few days left in the index, was gaining 14 cents at 89 cents. I guess it makes sense to send equity that's about to vanish out on a high note, so good luck to all the buyers out there. Good luck to all of us, really. Our tax dollars are funding a large part of this brighter day, so we do have an interest in seeing this company fixed. Now, I understand that GM's gigantic cost structure, especially during a deep recession, couldn't be sustained forever, but forgive me if I struggle to find many winners in this situation. Earlier this year I said that pretty much everybody involved, shareholders, auto workers, retirees and taxpayers, had the potential to lose big. Fine, not everyone at the company has been laid off in the last five years. Is that the good news? I know. We have to move forward, not backward, and being nostalgic about the quintessential American manufacturing company is a waste of time. Don't forget though that GM still has to figure out a way to sell cars after it gets out of the court system. For the record, the other stock that doesn't have much time left in the Dow, Citigroup ( C), was down a penny at $3.71.
Now It's Cisco and Travelers( At 9:15 a.m. EDT) Two Dow changes as the new week arrives -- GM ( GM) is getting replaced by Cisco Systems ( CSCO) and Citigroup ( C) will be removed to make room for Travelers ( TRV), a name that used to be part of the index.
Pretty much everyone expected the first one considering GM finally sought bankruptcy protection after basically the most telegraphed filing in history. The second was a bit more of a surprise, but only because you could probably argue it was overdue, considering the government's stake in Citi and the fact that the bank's shares have been flattened by the banking crisis. Almost looked like Citi was going to stay in the club. As noted last week, GM has been part of the DJIA continuously since 1925. The last change came in September when Kraft ( KFT) replaced another troubled company, AIG ( AIG). In case you're wondering, the market isn't worrying much about GM. Futures say that stocks should open higher in New York.