Stocks rise on GM-union accord

11/11/2005

Friday November 11, 2:15 PM EST
By Jennifer Coogan

NEW YORK (Reuters) - U.S. stocks rose on Friday, boosted by blue-chip General Motors Corp. (GM) after its unionized workers ratified a deal to cut the automaker’s health-care costs.

In addition, declining oil prices helped equities by easing concerns about the impact of high energy costs on businesses and consumers.

GM’s stock gained 4 percent to $24.45 and gave the blue-chip Dow average its biggest boost after the United Auto Workers union said GM’s employees have agreed to accept a deal to shift some health-care costs to hourly workers. GM, the world’s largest auto maker, has said the agreement would save $1 billion a year.

The Dow Jones industrial average was up 30.49 points, or 0.29 percent, at 10,670.59. The Standard & Poor’s 500 Index was up 1.38 points, or 0.11 percent, at 1,232.34. The technology-laced Nasdaq Composite Index was up 3.65 points, or 0.17 percent, at 2,200.33.

The gains in GM’s stock marked a partial recovery from its steep back-to-back slides on Wednesday and Thursday that brought it to a 23-year low.

“The UAW ratifying the changes GM was looking to put into place was a big plus for that stock, which has been pounded lately,” said Todd Clark, director of stock trading at Nollenberger Capital Partners in San Francisco. “Plus crude is trading below $59, and that is continuing to help the markets.

U.S. crude oil futures for December delivery rose 15 cents to $57.95 a barrel in early afternoon trading. In overnight electronic trading, NYMEX December crude touched $56.93, the lowest since July 21.

Shares of Dell Inc. (DELL), the world’s largest computer maker, gained 0.9 percent to $29.46 and lifted other large-cap technology shares, a day after the company said it plans to buy back at least $1.7 billion of stock during the fourth quarter. .

Microsoft Corp. (MSFT) rose 0.8 percent to $27.31, giving the Nasdaq its biggest lift and also helping the S&P 500 to extend gains.

Department store operator Kohl’s Corp. (KSS) said late on Thursday its quarterly earnings rose 15 percent as its focus on new clothing brands attracted customers to its stores. Kohl’s shares added 3.1 percent to $50.64.