GM sweetens the deal to bondholders - WDRB 41 Louisville News

GM sweetens the deal to bondholders

Wall Street is bouncing back after Wednesday's big loss.  Oil continued to defy the laws of supply and demand by jumping again, lifting energy stocks.

The Dow is up 103.78 points to close at 8,403.

The Nasdaq also closed up 20.71 points at 1,751.

-----

General Motors is trying to sweeten the deal it's offering to bondholders.  The automaker will offer bondholders 10% of the company's stock with warrants to buy up to 15%.

In turn, they would agree to support selling the company's assets to a new company under bankruptcy court protection.

GM says if the bondholders don't agree to support the sale, the amount of stock and warrants they receive would be reduced or eliminated.

-----

Monday will be a crucial day for GM.  That's the deadline for the automaker to finish restructuring or file for bankruptcy.  It's also the day GM is expected to identify fourteen factories across the U.S. it will close by the end of 2010.

Four vehicle assembly plants will be among those to close, along with parts stamping, engine, and transmission factories.

That could leave as many as 21,000 people without a job.

-----

Economic reports suggest the economy may be starting to stablize, but the news isn't so good on the housing front.  The government is releasing a report saying orders for big-ticket manufacturing items such as TVs and kitchen appliances were up much higher than expected.

The Commerce Department says orders for durable goods rose 1.9% in April.  That's the largest increase in the last sixteen months.  New orders have risen in two of the past three months, after six straight declines.

Analysts believe this could be a sign the deep recession in manufacturing may be bottoming out.  But they believe a sustained rebound is still quite a while away.

The president is also signaling we may be closer to recovery. "When you look at the economy right now, I think it's safe to say we have stepped back from the brink, that there is some calm that didn't exist before."

News on the housing front is not so good.  A report from the Mortgage Bankers Association shows a record 12% of homeowners with a mortgage are behind on their payments or in foreclosure.

California, Nevada, Arizona, and Florida account for 46% of new foreclosures in the country.  And the Commerce Department says new home sales were almost flat last month, with the numbers indicating recovery in the housing market will likely be a slow and gradual processs.

On the job front, the number of workers filing new claims for unemployment dropped last week.  According to the Labor Department, initial claims for benefits declined to 623,000, down 13,000 from the previous week.

It's the second straight week new claims have fallen.  The number of people continuing to collect unemployment reached a record high, though, with almost 6.8 million Americans still out of work, more than double what it was a year ago.

-----

Time Warner is spinning off AOL as an independent company.  The move ends the massive media marriage formed in 2001.

It was expected to meld old media with new media, but it only produced big losses.

Time Warner officials say the move will allow AOL to have a better opportunity to achieve its full potential as a leading independent Internet company.

-----

Geoffrey the Giraffe is getting some new friends to play with.  Toys R US has purchased FAO Schwarz.  No financial details of the agreement have been announced.

FAO Schwarz filed for bankruptcy twice in 2003 after struggling for several years.  Toys R US has over 1500 stores around the world.

847 of those are in the U.S.

Powered by Frankly
All content © Copyright 2000 - 2017 WDRB. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.