Stocks are showing considerable weakness during mid-morning trading on Monday, as investors react poorly to some negative news from the auto sector. Profit taking is also contributing to the weakness in the markets following recent gains.
The selling pressure comes after President Obama and his top advisers determined that neither General Motors (GM) nor Chrysler is viable and that taxpayers will not spend billions more to keep the pair of automakers open forever.
At the request of the White House, Rick Wagoner is stepping down as chairman and CEO of General Motors, with Fritz Henderson, GM president and chief operating officer, set to replace Wagoner as CEO.
The Obama administration will continue to provide operating funds for the next few weeks, but it has given both GM and Chrysler a final deadline, threatening bankruptcy if the beleaguered auto giants do not significantly increase their efforts to restructure their business.
The major averages have moved roughly sideways in recent trading, lingering near their worst levels of the day. The Dow is currently down 234.81 at 7,541.37, the Nasdaq is down 49.77 at 1,495.43 and the S&P 500 is down 23.86 at 792.08.
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