Slight growth for US stocks

Wall Street showed further signs of stability today, rebounding from an early sell-off to end higher, after the US government said it would assist troubled US carmakers.

Wall Street showed further signs of stability today, rebounding from an early sell-off to end higher, after the government said it would assist troubled US carmakers.

Stocks managed their rebound after the Treasury Department said it was prepared to assist the nation's big three carmakers.

The day's gains left blue chip stocks little changed for the week and gave the tech-heavy Nasdaq composite index a 2% advance.

"It's hard to say if this is indeed the beginning of a recovery, but it could be," said Matt King, chief investment officer of Bell Investment Advisors. "It seems like the past few Fridays we've ended the week on a positive note."

Stocks have shown an impressive advance since their mid-November lows and, more important, trading has been more orderly with fewer panicked declines in the face of bad news.

The Dow Jones industrial average was down more than 200 at the open, but all the major indicators began to regain ground when the White House and the Treasury announced they were considering diverting money from the Wall Street rescue fund to the US carmakers.

"Things are looking a little bit brighter after they made those announcements," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group.

Stocks tumbled early today after a US$14bn (€10.4bn) rescue package for the carmakers was derailed in the Senate late Thursday when the United Auto Workers refused to meet Republican demands for big wage cuts. Lawmakers have called on the Bush administration to use a portion of the $700bn (€524.2bn) financial rescue to help the car companies.

General Motors and Chrysler have said they could run out of money within weeks without government help. Ford, which would also be eligible for aid under the bill, has said it has enough money to make it through next year.

According to preliminary calculations, the Dow rose 64.59, or 0.75%, to 8,629.68. The Dow tumbled 196 points Thursday as worries intensified that the car bill would stall in the Senate.

The Standard & Poor's 500 index rose 6.14, or 0.70%, to 879.73, and the Nasdaq composite index rose 32.84, or 2.18%, to 1,540.72.

The Russell 2000 index of smaller companies rose 17.22, or 3.82%, to 468.43.