Auto news a drag on markets

UPDATED:

Wall Street initially rebounded from some of its steep losses Tuesday but later gave up some of its gains, apparently because of bad news from the auto industry.

The seasonally adjusted annual sales rate of 10.6 million vehicles for October was the worst in more than a quarter center and far below the 16 million vehicles sold a year earlier, Autodata Corp. reported.

In November, light vehicle sales for Ford dropped 31 percent, Toyota’s plunged 34 percent and Honda’s plummeted 32 percent.

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The numbers were released as the Big Three automakers made preparations for a second appearance before Congress later this week to ask for a bailout.

One sign of good news among the carmakers was a statement to the Associated Press by the head of Ford, Alan Mulally, indicating that his company has enough money to see it through to 2010.

The Dow Jones Industrial Average initially regained about a third of its devastating 680-point plunge Monday — a drop of 7.7 percent, the 12th worst percentage decline in market history but the rally later calmed on the auto news.

Toward the close, the Dow Jones Industrial Average was up 147.11 to 8299.16, or 1.81 percent. The tech-heavy Nasdaq climbed 18.12 to 1416.19, or 1.30 percent, and the broader Standard & Poor’s 500 climbed rose 19.83 to 836.04, or 2.43 percent.

Routine bargain hunting may have had much to do with the rising indexes.

“Markets got oversold yesterday and nobody wanted to get in the ay when it was happening,” Art Hogan, the chief market strategist at Jefferies & Co., told CNNMoney.com. “Lo and behold, we woke up [today] and it looks like we created some bargains.”

The massive sell off Monday wasnt helped by a declaration from the National Bureau of Economic Research, which calls U.S. economic cycles, that the United States has been in recession for a year.