NEW YORK (AP) -- Wall Street advanced moderately Friday, as investors cheered the government's pledge to lend as much as $17.4 billion to U.S. automakers, but remained wary about whether the money will make a lasting difference for the beleaguered industry.
The decision to help tide other the struggling companies into the new year comes after a $14 billion bailout for Detroit automakers failed to make it out of the Senate last week.
The companies' cash flows have been dwindling to a slow trickle due to the weak economy, slumping sales and the credit crunch.
The White House said it will let automakers draw $13.4 billion in short-term financing, and another $4 billion will be added later.
"Allowing the auto companies to collapse is not a responsible course of action," President Bush said at a news conference Friday morning.
Investors have been especially concerned about the job market ramifications of a possible bankruptcy filing by an automaker like General Motors Corp. or Chrysler LLC, which some analysts said could result in as many as 3 million U.S. job losses. The government lost more than half a million jobs in November, and the Labor Department said Thursday that new claims for unemployment remained well above 500,000 last week. When unemployment rises, spending declines and credit deteriorates.
While relieved about the White House's decision Friday, Wall Street remained cautious. The industry that has already gotten billions in government funding - the financial sector - remains in sad shape. On Friday morning, Standard & Poor's downgraded its ratings on 11 major U.S. and European financial institutions, including Goldman Sachs Group Inc., JPMorgan Chase & Co., and Wells Fargo & Co.
In the first half-hour of trading, the Dow Jones industrial average rose 53.45, or 0.62 percent, to 8,658.44. The Standard & Poor's 500 index rose 4.64, or 0.52 percent, to 889.92, while the Nasdaq composite index rose 18.35, or 1.18 percent, to 1,570.72.
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com