Stocks Surge as GM Goes Bankrupt

The long outdated notion that what's good for General Motors is good for America was finally put to rest this week. What we've had instead is yet another case of the stock market ignoring bad news by rallying when many expected it to decline.

On Monday, GM entered its long-awaited bankruptcy. The Standard & Poor's 500 jumped 2.6 percent to its highest level of 2009. And the Dow Jones industrials jumped 221 points, perhaps partly in celebration of the fact that GM shares will no longer hold the Dow back. Citigroup shares won't either. GM and Citi are to be replaced by Travelers and Cisco Systems effective Monday.

All told, the S&P at Monday's close had soared 39 percent from its March 9 closing low. Yesterday, the market was hit with heavy profit taking, particularly in commodities-related issues. Then the market rebounded today.

The rally has been fueled most recently by some evidence of possible growth in manufacturing around the world, reflected particularly in surging commodity prices.Read more...