Stock Market News: Chrysler and Bank of America
The stock market appears to be rallying again today, heading higher as optimism continues. Indeed, there seems to be a general feeling that the worst is over for the recession, and that the economy won’t be going anywhere near the levels of a 1930s style Depression. News that is probably helping the stock market along includes the Chrysler bankruptcy and the changes in governance at Bank of America.
Chrysler expected to file for bankruptcy
In spite of efforts and hopes by the government, Chrysler has been unable to negotiate effectively with hedge funds holding the company’s debt. As a result, Chrysler is expected to file bankruptcy very soon. Since Chrysler is privately held, it doesn’t have stock on the market to help drag down efforts. And, even so, investors may see the restructuring of Chrysler as a good thing. Chrysler is expected to partner with Fiat. If the Chrysler deal goes well, it might provide an example for GM to follow.
Ken Lewis no longer Chairman at Bank of America
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Bank of America stock is up on the news that Ken Lewis has been relieved of his duties as Chairman of the Board at Bank of America. Until the most recent shareholder meeting, Lewis has held the combined position of Chairman and CEO. Shareholders, though, disillusioned with all that has happened in the past year, voted to split the top job into two. Lewis remains CEO, but he is no longer Chairman (Walter Massey has that job now). The move was meant to undercut Lewis to some degree, and shareholders have expressed their displeasure with the Countrywide and Merrill Lynch acquisitions.
It is clear that, overall, investors are feeling hopeful about the economy and the direction things are likely to go in the near future. It will be interesting to see how long this new-found optimism will last.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
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