AMSTERDAM – General Motors Co. said Tuesday it has reached an agreement to sell its struggling Saab Automobile arm to the small Dutch luxury carmaker Spyker Cars NV.
GM has not specified terms of the deal, but a Wall Street Journal report citing anonymous sources says the sale price is roughly $74 million, and GM will retain preferred shares in Saab worth $326 million.
As part of the deal, the Swedish government will guarantee a euro400 million ($566 million) loan from the European Investment Bank to Spyker, the Journal reported.
The deal would be a coup for Spyker and a lifeline for Saab, which has around 3,500 employees in Sweden.
The sale of Saab is "great news for Saab employees, dealers and suppliers, great news for millions of Saab customers and fans worldwide, and great news for GM," said John Smith, a vice president at the company.
NEW YORK – Stocks rebounded from an early slide Tuesday as stronger consumer confidence boosted hopes for the economy.
The market advanced after the Conference Board said its index of consumer confidence rose to 55.9 in January from 53.6 in December. It was the third straight increase and the highest level in more than a year.
The Dow Jones industrial average rose 85 points in afternoon trading, boosted by a big gain in Travelers Cos. after the insurer said an absence of catastrophe costs and a recovery in its investment portfolios lifted profits 60 percent for the final three months of 2009.
Concerns about the global economy had been holding the market lower. China moved ahead with a plan to curb bank lending to keep that country's economy from overheating. Investors in the U.S. and elsewhere are concerned a slowdown in China could destabilize a worldwide recovery.
Meanwhile, Federal Reserve policymakers were beginning a two-day meeting on interest rate policy. The central bank is expected to keep rates at record lows, though investors will be looking at the Fed's assessment of the economy in a statement that will follow the meeting on Wednesday.
Stocks broke a three-day slide Monday as Fed Chairman Ben Bernanke's prospects for confirmation to another four-year term brightened. His term ends Sunday. Doubts about his ability to get confirmed in the Senate last week helped destabilize the stock market.
Michael Binger, portfolio manager at Thrivent Investment Management in Minneapolis, said a 5.1 percent drop in the Standard & Poor's 500 index in the final three days of last week is making it easier for stocks to resume their 10-month advance.
"When stocks get a little extended it kind of paralyzes the bulls a bit," Binger said. "Right now, stocks are not that extended."
In early afternoon trading, the Dow rose 84.50, or 0.8 percent, to 10,281.36. The Standard & Poor's 500 index rose 6.27, or 0.6 percent, to 1,103.05, while the Nasdaq composite rose 15.22, or 0.7 percent, to 2,226.02.
Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 524.1 million shares, compared with 607.5 million shares traded at the same point Monday.
The dollar rose against other major currencies, while gold advanced.
Crude oil fell 34 cents to $74.92 per barrel on the New York Mercantile Exchange.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3.63 percent from late Monday.
Dow component Travelers jumped $1.97, or 4 percent, to $50.86 after its report.
Technology shares got a boost from stronger profits at Apple Inc. The stock rose $9.83, or 4.9 percent, to $212.70.
The Russell 2000 index of smaller companies rose 1.63, or 0.3 percent, to 619.74.
Asian markets fell as concerns rose about Japan's economy hurting the country's bond rating. Standard & Poor's lowered its outlook on Japan's credit rating to negative from stable, saying it would slash the country's long-term rating if its economy remains weak and debt stays high.
Japan's Nikkei stock average fell 1.8 percent, while Hong Kong's Hang Seng fell 2.4 percent.
Britain's FTSE 100 rose 0.3 percent, Germany's DAX index and France's CAC-40 each advanced 0.7 percent.
ATLANTA – Delta Air Lines posted a $25 million net loss for the final three months of 2009, much smaller than a year earlier.
The fourth-quarter loss reported Tuesday by the world's biggest airline was equivalent to 3 cents a share. In the year-ago quarter, Delta lost $1.4 billion, or $2.11 a share.
Revenue rose 1 percent to $6.8 billion from $6.7 billion. Delta completed its acquisition of Northwest Airlines in the fourth quarter of 2008.
Excluding special items, Delta lost 27 cents per share. Analysts surveyed by Thomson Reuters were expecting a loss of 24 cents a share on revenue of $6.86 billion.
Delta, based in Atlanta, says system capacity will be down 3 percent to 5 percent in the first quarter of this year.