Stocks are indicating a lower open on Monday after stocks finished another week in the green on Friday. Much of the downward momentum comes on the heels of news that the auto giants will not be receiving more government funds until they step up their efforts to reorganize.
At the request of the White House, Rick Wagoner is stepping down as chairman and CEO of General Motors (GM), with Fritz Henderson, GM president and chief operating officer, 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.
Wagoner's removal came just before President Barack Obama's updated rescue plan for GM. The auto-making giant has already received $13.4 billion in loans from the government. The company almost ran out of capital towards the end of 2008 before it received the emergency loan from the government.
Upon receiving the initial loan from the U.S. Treasury, GM was under a mandate to streamline and reorganize by March 31. As it became apparent that GM would not be able to meet that deadline, Wagoner's days became numbered - especially since the company said it now requires another $16.6 billion to continue to survive.
President Obama and his top advisers have determined that neither GM nor Chrysler is viable and that taxpayers will not spend billions more to keep the pair of automakers open forever.
In other news, President Obama will speak later before heading across the Atlantic to the London summit of the G20 group of industrialized and emerging economies.
Ensuring that there is concerted action around the globe to jump start economic growth and that we are advancing a regulatory reform agenda to ensure that this crisis never happens again will be the key messages of the London trip, White House Press Secretary Robert Gibbs said.
Optimism surrounding the G20 summit has waned, as investors fear that earlier hopes that the countries will agree to a coordinated fiscal boost appear to have been crushed by skepticism in many European governments.
Weakness prevailed throughout Friday's trading session, as investors cashed in on some of the recent gains. Some of the weakness came as investors digested mixed economic news and kept a close eye on a meeting between President Obama and the CEOs of the nation's biggest banks.
Despite the losses on the day, the major averages still closed higher for the third straight week due largely to the rally seen on Monday. The Dow rose 6.8 percent for the week, while the Nasdaq and the S&P 500 posted weekly gains of 6 percent and 6.2 percent, respectively.
Crude oil futures are retreating $1.49 to $50.89 a barrel after the commodity rose $0.31 or 0.6 percent to $52.38 a barrel in the week ended March 27th, which marked the sixth consecutive week of gains for the commodity.
Meanwhile, gold futures are currently falling $10.20 to $915.10 an ounce. In the previous week, the precious metal fell $28.90 or 3 percent to $925.30 an ounce.
On the currency front, the dollar rose 2 percent against the yen last week to 97.88 yen, while it gained 2.1 percent against the euro to $1.3295 a euro. Currently, the dollar is trading at 96.947 yen and is valued at $1.3203 versus a euro.
In overseas trading, stock markets across the Asia-Pacific region closed lower on Monday, partly offsetting some of their recent gains. Japan's benchmark Nikkei 225 Index showed a steep decline, ending the session down 4.5 percent.
The major European markets have also come under considerable selling pressure. The U.K.'s FTSE 100 Index is currently down 2.2 percent, while the French CAC 40 Index and the German DAX Index are down 2.1 percent and 3.2 percent, respectively.
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