General Motors is helping to buoy the blue chips this morning after Citigroup upgraded the automaker from sell to buy. The broker, which has a $41 price target on GM, said that GM is currently not a buy-and-hold stock, as the company's long-term turnaround is heavily tied to the outcome of this fall's labor negotiation with the United Auto Workers (UAW).
Reports released early today suggest that UAW President Ron Gettelfinger agrees in principle to the creation of a multibillion-dollar, union-controlled health-care trust fund. The creation of such a fund could relieve GM and other Detroit automakers from billions of dollars worth of retiree health-care liabilities.
As the first hour of trading wraps up, GM is up 5.75% and has cracked through the 32 level. This level has acted as short-term resistance for the shares recently, and a close above 32 could be a bullish indicator for GM. Meanwhile, the broader Dow Jones Industrial Average (DJIA 13,416) is up about 125 points.