(Sirius XM story updated with stock closing price and additional look at Sirius XM's stock price and volume increases)

NEW YORK ( TheStreet) -- Sirius XM ( SIRI - Get Report) stock finished Monday's trading session up about 4% to 86 cents after sliding 3.1% to 80 cents Monday morning.

Sirius XM stock had been trading at above-average volumes. More than 159 million shares were trading hands Monday early afternoon, compared with the average three-month volume of 90.1 million shares.

Many market observers believe the rise in volume had much to do with the addition of Sirius XM to the NASDAQ Q-50 Index, effective at the market open Monday.

The purpose of the NASDAQ Q-50 Index is to track the performance of the 50 securities that are next in line to replace the securities currently on the NASDAQ-100 Index.
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At the same time, Wunderlich Securities analyst Matthew Harrigan says the jump may have to do with favorable auto sales news, which of course has a positive bearing on Sirius XM -- given that automakers are of course, a crucial driver of subscriber-growth for the company.

Sirius XM says it has arrangements with every major automaker.

"Looks like we're gonna have a strong March number," Harrigan says, citing reports from auto industry experts such as Edmunds.com.

Last week, Edmunds.com issued a report saying that an early look at March auto sales suggests that sales are currently pacing at a seasonally adjusted annual rate of 13.2 million. Edmunds.com writes that the industry is being helped by customer incentives coming from automakers including Toyota.

"There is a lot of money in the marketplace right now, and people are responding," Edmunds.com analyst Jessica Caldwell writes.

Earlier today, Sirius XM stock had slipped 3.1% to 80 cents in the morning, driven by multiple factors that essentially boiled down to 1) Howard Stern, and 2) auto-sales outlooks, according to a analysts.

"Speculation on whether Howard Stern will stay with Sirius or leave," could be what's driving Sirius XM stock lower Monday, David Joyce, an analyst with Miller Tabak said.

Joyce had noted that the controversial radio host frequently talks about his contract on the show, and something about the fact that Stern's five-year, $500 million contract with Sirius XM is set to expire at the end of 2010 might have been pressuring Sirius XM's stock.

Aside from this, Joyce couldn't find another reason for the stock's earlier retreat, especially given that the company is showing strength "fundamentally," he said. Joyce cited higher auto sales, cost-cutting, new royalty revenue, good EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and strong cash flow at Sirius XM as drivers of the company's improving fundamentals.

John Hain, an analyst at Barrington Research Associates, on the other hand, thought that ongoing concerns about unemployment -- despite recent data showing initial jobless claims have fallen -- and the negative impact it could have on auto purchases, might have been putting some pressure on Sirius XM stock Monday. This factor may have also been compounded by Toyota vehicle recall news, according to Hain.

-- Reported by Andrea Tse in New York


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