DETROIT (Reuters) –
Advisers to General Motors Corp (GM.N) bondholders representing $27 billion in the automaker's debt urged investors on Friday to support a debt swap negotiated over the past week with the Obama administration.

Bondholders have until Saturday to register their support for the terms of a deal that would give them up to 25 percent of a reorganized GM. That offer is contingent on the U.S. Treasury determining that enough investors have signed on in support.

Investors representing at least 35 percent of GM's bonds are expected to support the sweetened offer from the U.S. Treasury, which will be the automaker's largest shareholder and creditor.

In a conference call open to GM bondholders, advisers to an ad hoc committee representing institutional investors urged other bondholders to offer their support for the deal.

GM's bondholders have been advised by law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP and financial adviser Houlihan Lokey Howard & Zukin Capital Inc.

Andrew Rosenberg, the legal adviser to the GM bondholder committee, said investors should understand the automaker's intent to file for bankruptcy on Sunday or Monday.

"GM, assuming its board approves, will file for bankruptcy Sunday, Monday of next week," he said.

GM bondholders had been in intermittent talks with members of the U.S. Treasury's autos task force overseeing GM's restructuring since early in the year.

Earlier this week, bondholders rejected a proposal that would have given them a 10 percent stake in the reorganized GM,

and a tender offer for new stock in the company was withdrawn.

In a sweetened deal, the U.S. Treasury and GM offered bondholders warrants for another 15 percent stake under a proposed deal that could be rescinded if too few bondholders sign on to support it.

Rosenberg said the new deal terms had been negotiated in "the last week."

Eric Siegert, who has been the financial adviser to the bondholder committee, said the new deal represented a total government investment in GM of nearly $60 billion.

For the government to be repaid in full, GM would have to have an enterprise value of $69 billion based on its expected 72.5 percent stake in the company, Siegert said.

By the time GM reached that market value, bondholders would have recovered $14 billion from their new equity, he said.

"That's a very, very unusual result that you have a junior creditor ... where a company is in bankruptcy (and) where they receive that much value before a senior creditor is paid in full," Siegert said.

He added: "The federal government will not be paid in full on its equity investment until the value of General Motors reaches $69 billion."

Bondholder advisers said they would not disclose the names of investors who supported the U.S. government's plan for GM, which would include a quick sale of its best assets to a new company funded by the U.S. Treasury.

Later on Friday, a group of individual GM bondholders called GM Bondholders Unite said White & Case bankruptcy partner Thomas Lauria will represent their group. Lauria was also representing Chrysler bondholders, the group said.

(Reporting by Kevin Krolicki, David Bailey, Soyoung Kim, Poornima Gupta, Walden Siew and Elinor Comlay, editing by Matthew Lewis)

NEW YORK – Jewelry retailer Tiffany & Co. said Friday that its first-quarter profit plunged 62 percent as sales tumbled, particularly in the U.S., as consumers continued to shy away from luxury purchases.

Still, the earnings matched Wall Street's expectations and the company maintained its profit outlook for the full year. Tiffany said it cut spending in the first quarter to offset weak sales by cutting 10 percent of staff — or 900 people — and lowering marketing spending.

Tiffany, like many other luxury companies, has seen sales soften as consumers cut back on big-ticket, discretionary purchases amid the recession. Tiffany said sales of items over $50,000 were particularly weak, and lower-priced silver and gold jewelry performed better.

The New York-based retailer earned $24.3 million, or 20 cents per share for the three months ended April 30, down from $64.4 million, or 50 cents per share, a year ago.

That matched expectations of analysts polled by Thomson Reuters.

Edward Jones analyst Matt Arnold said U.S. sales were worse than expected but the company was able to make up for the shortfall elsewhere.

"The diversification of the company kind of shined through here," he said. "Other geographies picked up the slack and enabled the company to come in okay."

"Despite reduced consumer demand in the luxury sector, Tiffany is, and is projected to remain, solidly profitable and will generate substantial cash from operations," Chairman and Chief Executive Michael J. Kowalski said in a statement.

Sales fell 22 percent to $523.1 million from $668.1 million a year ago and below analysts' expectations for revenue of $533 million.

The biggest sales drop was in the Americas, where slid 31 percent, with U.S. sales in stores open at least one year, a key retail metric known as same-store sales, down 34 percent. That includes a 42 percent sales drop at its New York flagship store.

The company said the drop was due to less spending by financial-sector employees and a drop in foreign tourists.

However, Tiffany said the drop in tourism might have benefited European stores, where same-store sales rose 3 percent and total sales fell 8 percent, mostly due to the stronger dollar. Sales in Asia-Pacific fell 9 percent.

Excluding the impact of the stronger dollar, worldwide sales slipped 18 percent and same-store sales dropped 21 percent.

Chief Financial Officer Jim Fernandez said Tiffany faced tough competition during the quarter.

"Our business in the U.S. is being affected by challenging economic conditions, but we're also facing a headwind from continued heavy and unprecedented levels of discounting by many competitors, including liquidation sales by some who will likely be closing their stores," he said in a conference call.

In an effort to cut costs, the company reduced marketing spending. It has reduced catalog mailings and begun to rely more on e-mail messages to reduce costs. It also cut about 900 jobs, or 10 percent of staff, during the quarter.

"They're doing a good job navigating what's going to be a really tough environment for luxury goods," analyst Arnold said.

Tiffany reaffirmed its guidance for full-year earnings from continuing operations of $1.50 to $1.60 per share. Analysts expect profit of $1.56 per share.

The company ran 209 stores and boutiques at quarter's end, up from 192 shops a year earlier.

Shares rose 24 cents cents to close at $28.37 Friday.

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AP Retail Writer Michelle Chapman contributed to this report from New York.

A late-day shot of adrenaline sent stock prices soaring Friday, giving Wall Street its third straight monthly gain. After fluctuating much of the day on mixed economic data, stocks soared just before the close. Analysts attributed the surge to buying by short-sellers who had bet that stocks would fall and then had to rush to buy when those bets turned out to be wrong. Analysts also said a jump in commodities prices, which came on expectations that an improving economy will lift demand for raw materials, fed the late-day advance.

The Dow Jones industrial average rose 96.53, or 1.2 percent, to 8,500.33.

The Standard & Poor's 500 index rose 12.31, or 1.4 percent, to 919.14.

The Nasdaq composite index rose 22.54, or 1.3 percent, to 1,774.33.

For the week:

The Dow is up 223.01, or 2.7 percent.

The S&P is up 32.14, or 3.6 percent.

The Nasdaq is up 82.32, or 4.9 percent.

For the month:

The Dow is up 332.21, or 4.1 percent.

The S&P is up 46.33, or 5.3 percent.

The Nasdaq is up 57.03, or 3.3 percent.

For the year:

The Dow is down 276.06, or 3.2 percent.

The S&P is up 15.89, or 1.8 percent.

The Nasdaq is up 197.30, or 12.5 percent.