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A startup called Zeebo Inc. is betting that people in emerging markets want to play good video games just as much as people in the U.S., Western Europe and Japan do.

Zeebo plans to launch its "video game console for the next billion" in Brazil next month for $199 and other countries later in the year for $179. It was developed using the cell phone technology of Qualcomm Inc. (nasdaq: QCOM - news - people ), the San Diego company best known for its mobile phone chips.

The Zeebo unit is light, and a little larger than the Nintendo (other-otc: NTDOY.PK - news - people ) Wii. But instead of playing video games on disks, the Zeebo will use digitally downloaded games - distributed through cell phone networks that players don't even have to subscribe to.

The console is not meant to directly compete with the latest, powerful devices like Sony Corp. (nyse: SNE - news - people )'s PlayStation 3, Microsoft (nasdaq: MSFT - news - people )'s Xbox 360, or the Wii.

Rather, said Zeebo CEO John F. Rizzo, it is targeted at consumers in emerging markets like India, China, Brazil and Eastern Europe who generally can't afford the latest high-end consoles, or the games published for them. In many of these countries, cell phone service is more readily available and cheaper than wired broadband.

Zeebo, unveiled Monday at the Game Developers Conference in San Francisco, attaches to any TV and uses a fraction of the electricity that high-end gaming consoles need. Its batteries can be juiced with what looks like a typical cell phone charger.

The Zeebo's technological capability is somewhere between that of the original PlayStation, which launched in 1994, and its 2000 follow-up, the PlayStation 2. By U.S. standards this won't elicit many oohs and aahs, but Rizzo said the vast majority of the Zeebo's target market has not played an ultra-realistic modern video game. In Brazil, for example, a two-decades old system called Mega Drive, called Sega (other-otc: SEGNF.PK - news - people ) Genesis in the U.S., still sells well, said Reinaldo Normand, Zeebo's vice president of business development and licensing.

Zeebo hopes that by improving on systems like Mega Drive and offering wireless downloads of games, it will attract the emerging middle classes of India, China and Brazil to modern video games. A game like "Quake" may be old news to an American gamer today, but in 1996 it blew people's minds - just what Zeebo hopes it will do in Brazil.

Big game publishers like Electronic Arts Inc. (nasdaq: ERTS - news - people ), THQ Inc. (nasdaq: THQI - news - people ) and Activision Blizzard (nasdaq: ATVI - news - people ) Inc. have agreed to make their games available for Zeebo. The question now is whether its target market, which the company estimates to be as big as 800 million, will sign on as well.

So far, video game consoles have not been successful in emerging markets. In addition to the price barrier for many consumers, piracy is widespread, which scares game publishers away.

Zeebo plans to sell games for a few dollars more than what pirated games cost on the black market (about $10 in Brazil, for example, compared with about $100 for a legally available game), hoping that the ability to buy games from the comfort of home will lure consumers. Next year, the company plans to drop the price of the console to $149.

Mike Yuen, senior director of games and services at Qualcomm, compared the Zeebo's content delivery system to the Amazon Kindle, the electronic book reader that requires no subscription fees - just the purchase of the device and the content. Zeebo also said it plans to let customers have access to the console's broadband wireless service by connecting the device to their PCs.

Zeebo did not say how much money went into developing the console, but Rizzo noted that the company has only five full-time employees. The system, he said, is "designed from the ground up to be economically viable."

"Launching a new console is not for the faint of heart," Rizzo said.

Zeebo's launch reminded some people in the industry of the Phantom gaming system, which earlier this decade tried to digitally distribute computer games - but didn't really get anywhere. However, Wedbush Morgan analyst Michael Pachter pointed out a key difference. While the Phantom was meant for U.S. markets, which already had easy access to high-end gaming consoles, the Zeebo taps an entirely new market.

Citing McDonald's (nyse: MCD - news - people ), which popularized the fast-food hamburger, and Wal-Mart (nyse: WMT - news - people ), the mother of one-stop stores, as examples, Pachter said "anyone who's ever made money in business has exploited an unexploited market."

Copyright 2009 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Wall Street retreated Monday on concerns that Israel's attack on Gaza might disrupt oil production and shipments from the Middle East, driving oil prices higher.

Investors remained cautious in a holiday-shortened week, unwilling to make many big bets in the final three days of trading for 2008. Israel's escalating attacks against Gaza's Hamas rulers made traders more hesitant to buy.

The tensions pushed oil prices above $40 a barrel during the session, though crude was up just 37 cents at $38.03 a barrel on the New York Mercantile Exchange at midday. Oil has fallen more than $100 from its peak of $147.27 a barrel on July 11 as a slowing economy curbed demand.

Todd Leone, managing director of equity trading at Cowen & Co., said volume is extremely light and that is contributing to the market's swings. Low volume tends to skew price movements.

"What's going on in Israel didn't read well over the weekend," Leone said. "Beyond that, it is an incredibly quiet session. It's really not taking much to move the markets."

Investors also digested a potential blow to dealmaking on Wall Street. On Sunday, Kuwait's government canceled its $17.4 billion K-Dow Petrochemicals joint venture with Dow Chemical Co., saying it was "very risky" because of the global financial crisis and low oil prices. The joint venture was set to begin Thursday.

Rohm & Haas Co. maintains that its proposed $15.3 billion takeover by Dow Chemical won't be affected by Dow's substantial loss of income from the venture. But investors punished shares, driving them down $10.76, or 17 percent, to $10.76. Dow Chemical shares lost $3.89, or 21 percent, to $15.03.

In early afternoon trading, the Dow Jones industrial average fell 121.55, or 1.43 percent, to 8,394.00.

Broader indexes also declined. The Standard & Poor's 500 index fell 14.21, or 1.63 percent, to 858.59; the Nasdaq composite index fell 34.20, or 2.23 percent, to 1,496.04.

Declining issues were ahead of advancers by nearly 2 to 1 on the New York Stock Exchange, where volume came to 353.1 million shares.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.06 percent from 2.14 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from 0.01 percent late Friday.

The dollar was lower against other major currencies, while gold prices edged higher.

Wall Street has largely written off the final three trading days of 2008, the worst year since Herbert Hoover was president. The Dow has fallen 36.2 percent, the biggest drop since 1931 when the Great Depression sent stocks reeling 40.6 percent. And the Standard & Poor's 500 index is set to record the biggest drop since its creation in 1957. The index of America's biggest companies is down 40.9 percent for the year.

Dave Rovelli, managing director of trading at brokerage Canaccord Adams, said investors will be waiting to make big moves until after the Jan. 20 inauguration of President-elect Barack Obama. Wall Street is eager for details on his proposed stimulus package for the economy.

"No one is going to do anything until the New Year," he said.

However, if companies release earnings warnings early in January, or if the first wave of fourth-quarter reports are disappointing, the market could see a return of heavy selling. Investors will be focusing on any word from companies deemed critical to the economy, especially from the beleaguered financial and retail sectors.

This week, investors will also be looking for insight into how retailers fared after the weak Christmas selling season. Stores have slashed prices even further to entice post-holiday shoppers but with many consumers nervous about the economy they're reluctant to open their wallets. That's a troubling prospect for investors, since consumer spending accounts for more than two-thirds of U.S. economic activity.

The Russell 2000 index of smaller companies fell 14.35, or 3.01 percent, to 462.42.

Overseas, Japan's Nikkei stock average rose 0.09 percent. In afternoon trading, Britain's FTSE 100 rose 2.44 percent, Germany's DAX index rose 1.63 percent, and France's CAC-40 rose 0.47 percent.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Long-time subscribers to Forbes/Lehmann Income Securities Investor will recall our various moans and groans about the bond market and its lack of any reasonable returns when compared to similar products among the preferreds. Well, things have changed, and this time for the better.

In fact, yields reached their bottom in October when AAA yields were at 6.9% and BBB at 10.2%. These are the kinds of returns we were used to seeing in preferreds last year--and then for much lower quality issuers.

At the end of November, the returns for AAA stood at 5.96% and BBB at 9.99 but with one big difference. U.S. Treasuries have sunk to a yield of only 2.84%, a leap of faith for a 10-year instrument that faces a Federal Reserve Bank, which is still inflating its balance sheet from a recent $800 billion to now $3 trillion and counting.

Special Offer: Richard Lehmann's portfolio of safe, conservative, high-yield fixed-income securities has beaten the stock market for years. Given the market pullback, some of his recommendations are now providing yields as high as 30%. Click here for his current buy list.

It takes a really scared investor to think he is safer lending the Treasury money at 2.84% versus, say, General Electric (nyse: GE - news - people ) at 7%. Are investors so focused on a complete financial meltdown that they choose to ignore the greater threat of inflation over a 10-year period. Oh sure, you say, they can always sell the 10-year Treasuries when the crisis passes, but then who do you think will buy them at this yield? Certainly not Mr. Market.

In any case, this month's Forbes/Lehmann Income Securities Investor features the first of, we hope, many more months in which we can recommend a complete complement of bonds. Well, not exactly complete in the sense that we are still reticent to recommend single B and CCC-rated issues despite their mouth-watering yields.

Secure your retirement with income from bonds, preferreds and convertibles. Click here to learn how with Forbes Lehmann Income Securities Investor.

(CNN) -- There's no indication when -- or if -- the White House and congressional leaders will reach agreement on the Democrats' proposal to give troubled U.S. automakers a financial lifeline.

General Motors Corp. and Chrysler could get $15 billion in federal loans as soon as December 15, according to a working Democratic draft of proposed legislation and a senior Democratic congressional aide.

Meanwhile, one key GM official already is talking about the need for more help from the government -- even before this package's approval.

In an interview Tuesday on CNN's "American Morning," Bob Lutz, GM vice chairman of global product development, told anchor John Roberts that he expects the industry to go back to Washington next year for more money.

John Roberts: A lot of taxpayers are asking if you get this $15 billion collectively, what will you do to make sure your company won't fail?

Bob Lutz: Well, first of all, GM will only get a portion of that money and ... this is simply a bridge loan which will get us into the next administration, where we hope we can do something more fundamental. Because the main problem is the lack of liquidity and the lack of revenue flowing in as we're facing absolutely the lowest, lowest car market in history, and it's not just the domestics, the Japanese are all down 30 percent and 40 percent. Their inventories are piling up. You know, this isn't a question of Detroit is in trouble; the whole automobile industry is going to be in trouble

Roberts: You don't see Toyota and Honda coming to the government for a handout. But based on what you said there -- that this is just the beginning -- you're going to need more money next year?

Lutz: I think that's a reasonable assumption.

Roberts: How much more?

Lutz: At this point, you know, that's going to have to be discussed with Congress. We'll have to see. But this is definitely a bridge loan that will solve the immediate liquidity problem

Roberts: When you come to Congress next year and say, OK, you gave us $15 billion in December, now we need X amount of money, how difficult a sales job will that be?

Lutz: You know, I don't think anybody in Congress or the president-elect assumes that this is all the money that is going to be required to bridge this liquidity crisis that the American automobile industry is facing, and, again, it all depends on how fast we have an economic recovery. Again, let me restate this. At 10.8 or 10.5 million total market, we do not have a viable automobile industry in this country for anybody.
iReport.com: How is the automaker crisis affecting you? Should there be a bailout?

Roberts: Yesterday, you took out a full page ad in the Automotive News Journal; it was a big mea culpa. I guess on GM'S part. You said in part we acknowledge we disappointed you. We violated your trust by letting our quality fall and our designs become lackluster. You also laid out a GM commitment to the American people. First thing, you said specifically we're committed to producing automobiles you want to buy and are excited to own. There are many people who might think that's just a fundamental tenet of free enterprise, and why should that be revolutionary?

Lutz: It isn't. I think people were expecting this sort of message. What we're trying to do with an ad like that is live down this legacy of the '80s. Everybody agrees that American cars of the '80s were not very good and were not competitive with the Japanese. But that was a long time ago.

We've now equaled the Japanese in productivity and quality, and speaking for General Motors we got Car of the Year with the Saturn Aura, Car of the Year for Chevy Malibu, Truck of the Year with the Silverado, Green car of the Year with the Silverado hybrid, and on and and on. Car of the Year with the Cadillac CTS.

Roberts: One more question, Bob, certainly, as a condition of this bridge loan, the government is going to appoint a car czar to oversee what you do with it. They will talk about what kind of models you should build, fuel efficiency you should get. There will be a government approval of any vehicles you make. Who would you like to see as the car czar?

Lutz: Wait a minute. We don't know if it will be a czar or overseer. I doubt whether this person would dictate the product policy.

Roberts: Certainly an idea they are talking about. Who would you be comfortable with as car czar?

Lutz: I wouldn't even -- other than myself? Unfortunately I'm not available because I'm still gainfully employed.

Roberts: Some people [are] floating the idea maybe [that former Massachusetts Gov.] Mitt Romney would be a good car czar. He comes down hard on you guys. His father [George Romney] ran American Motors for a time.

Lutz: Well, I hardly think that the automobile business is a genetic trait, but he would probably be satisfactory as would many other people.

They saved. They planned. Then housing tanked and the markets melted. Now they need jobs, and there aren't any


Photo Illustration by Dan Saelinger

 Six years ago, Paul Nelson gave up his long career in the defense industry for what he thought would be a peaceful retirement in Tucson. The weather was mild, the neighbors friendly. He had plenty of time to volunteer and garden.

But retirement hasn't worked out the way he planned. In 2006 his wife of 46 years died unexpectedly. He tried to swap their house for a smaller one and lost a chunk of his retirement savings in the process. Then this year the stock market cratered, wiping out almost everything he had left. Now the 71-year-old is looking for work at local hardware stores and Home Depot (HD) and contemplating filing for personal bankruptcy. "I have nothing left," says Nelson, a former Raytheon (RTN) engineer. "I am not alone, I think."

Far from it. An increasing number of people who retired in recent years, confident they had set aside enough to live on comfortably, are finding themselves strapped. The stock market plunge and the housing downturn have affected many Americans, of course. But retirees have been particularly pinched because their homes and investments are the primary assets they depend on for income. As a result, many of the country's elderly are finding themselves in Nelson's situation, low on money and looking for work. "Suddenly the rug has been pulled out from under them," says Alicia H. Munnell, director of the Center for Retirement Research at Boston College.

ANGRY AND BETRAYED
These are The Unretired. Seniors who thought they were set for life just a year ago now face the prospect of going back to work for two, five, even 10 years. They're sprucing up their résumés, calling old work contacts, and flocking to employment sites. There are no reliable stats yet on how many retirees are looking for work, but there are clear signs the number is growing. RetirementJobs.com, the largest career site for people over 50, saw traffic more than double, from 250,000 visitors in July to 600,000 in November. In April, before the worst of the market downturn, a survey conducted by the seniors group AARP found that 17% of responding retirees over 50 were considering or already going back to work.

These aren't just the spendthrifts or sloppy planners you would expect to run into trouble in retirement. Interviews with 35 of The Unretired show that many are people who did everything they were supposed to do—working for decades and regularly socking money away. Floyd McCoy, 67, retired three years ago after working for IBM (IBM) for 22 years and running his own consulting firm. But his $400,000 in savings has dropped 40% this year, and the value of his Weston (Conn.) house is down by a third. McCoy says he can't afford to keep the house he and his wife built 25 years ago for retirement. "I never knew life could be as challenging as this," he says.

The problems are compounded by a weak economy, with companies shedding jobs rather than hiring. Many retirees have been looking for months without luck. Their search is complicated by what some feel is a general reluctance to hire seniors, who may need extra training or extra health care. Gordon Scott, who lives in Solomons, Md., retired last year after 39 years as a police officer and teacher. With his savings down 30%, Scott started looking for a job and attended orientation for nursing school. "I was disappointed with my reception," says the 61-year-old. "You're viewed differently. I can pick up the signs."

Peter Fay, like many of The Unretired, feels angry and betrayed. The 63-year-old built up a $1 million retirement account as an executive at companies including Chiquita Brands International (CQB) and then at his own high-end flooring company in Scottsdale, Ariz.

The holiday shopping season got off to a surprisingly solid start, according to data released Saturday by a research firm. But the sales boost during the post-Thanksgiving shopathon came at the expense of profits as the nation's retailers had to slash prices to attract the crowds in a season that is expected to be the weakest in decades.

Sales during the day after Thanksgiving rose 3 percent to $10.6 billion, according to preliminary figures released Saturday by ShopperTrak RCT Corp., a Chicago-based research firm that tracks sales at more than 50,000 retail outlets. Last year, shoppers spent about $10.3 billion on the day after Thanksgiving, dubbed Black Friday because it was historically the sales-packed day when retailers would become profitable for the year.

But this year, many observers were expecting consumers to spend more time browsing than buying, amid contractions in consumer spendingand growing fears about economic uncertainty and trouble in the global financial markets.

"Under these circumstances, it's truly amazing when you think about all the news that led into the holiday season, it certainly appears that consumers are willing to spend more than most expected," said ShopperTrak co-founder Bill Martin. "Everybody wants value for their dollar, so we saw a tremendous response to the discounts."

While it isn't a predictor of overall holiday season sales, Black Friday is an important barometer of people's willingness to spend during the holidays. Last year, it was the biggest sales generator of the season while the Thanksgiving shopping weekend of Friday through Sunday accounted for about 10 percent of overall holiday sales.

Still, experts, who predict this year's overall holiday shopping period will be the weakest in decades thanks to an overall contraction in spending, caution that this year's sales growth may be hard to sustain.

Also complicating matters is a shorter buying season - 27 days between Black Friday and Christmas - instead of 32 last year.

Talk about a holiday surprise. Retail giant Wal-Mart Stores (WMT) announced just a week before Black Friday, the biggest sales day of the year, that it would have a new chief executive officer come February. Lee Scott, the company's CEO for the past nine years, is stepping down. He'll be replaced by Michael Duke, , 58, who currently leads the company's international division.

Retailers traditionally don't make such appointments right in the middle of their biggest selling season. But longtime Wal-Mart watchers see the change as more of a victory lap than a forced departure for the 59-year-old Scott, whose tenure had been marred by disappointing results and controversy until this year. "He's dealt with the public relations, the vicious union attacks, he's gotten morale back up—the best thing to do is leave at a moment of strength," says Howard Davidowitz, a retail consultant with his own firm in New York. "When you talk about management transition, this is as good as it gets."

Strategy Shift Lures Back Customers

Even long-term critics, such as the union-funded Wal-Mart Watch campaign, applauded the news, sort of. "Wal-Mart's announcement must be viewed in the context of the recent election," the group said in a statement. "It represents an opportunity for Wal-Mart to change from the low-wage, low-benefit business model to one that will be more appealing to an Obama Administration."

Wal-Mart's reputation took a beating in recent years as critics complained of its skimpy employee pay and health-care benefits as well as big-box stores that decimated smaller hometown rivals. Moreover, the nation's largest retailer seemed to lose its low-price focus, chasing designer apparel much like rivals Target (TGT) and Kohl's (KSS). Investors were disappointed, too, as the company's costly new store launches cannibalized sales at existing locations and Wal-Mart's once soaring stock price was relegated to the bargain bin.

The sorry streak began to change this year, in part due to the slumping economy luring customers back (BusinessWeek, 10/30/08) for cheap prices. Yet that shift was also aided in part by changes the retailer made in the past two years. Wal-Mart has been opening fewer locations and smaller stores when it does. A store remodeling program introduced skylights, wider aisles, and warmer colors to Wal-Mart's characteristically cold and cluttered layout. The company has also been editing its product assortment, focusing mostly on top sellers sold at rock-bottom prices. This holiday shopping season the chain is heavily promoting brand-name toys at $10 each.

Sales and Stock Up

As a result, Wal-Mart has been posting sales results sharply better than rivals in what is shaping up to be one of the worst sales years on record. Wal-Mart's stock is up this year, a rarity in the current dismal market. "This is Wal-Mart time," Scott told Wall Street analysts Oct. 27 during an annual presentation at company headquarters in Bentonville, Ark. "This is the kind of environment that Sam Walton built this company for." Wal-Mart shares rose slightly, to 51, on the news of Duke's appointment.

Doctors gave U.S. Attorney General Michael Mukasey a clean bill of health Friday morning after an apparent fainting spell, according to Gina Talamona, spokeswoman for the Department of Justice.

Mukasey, 67, was released from the hospital and returned to work Friday at the Justice Department.

"All tests at the hospital have come back with good results, and I feel fine," Mukasey said in a written statement.

The attorney general underwent medical tests at George Washington Hospital after collapsing Thursday night at the Federalist Society dinner at the Marriott Wardman Park Hotel in Washington.

The attorney general was given a CAT-scan on Friday morning which showed normal results, Talamona said. He was also given a MRI, a stress test and a stress echocardiogram.

"All of the tests have been reassuring. There is no indication that he suffered a stroke or any heart-related incident," Talamona said.

Mukasey had an uneventful night after being admitted to the hospital, she said, adding that he "looks good. He's very alert.

The doctors are describing him as very fit."

The doctors are describing him as very fit."

President Bush placed a call to Mukasey Friday morning.

"The AG sounded well and is getting excellent care," presidential spokeswoman Dana Perino said.

Mukasey was giving a spirited defense of the Bush administration's legal policies when his speech began to slur and he lost track of his thoughts about 30 minutes into his talk. Seconds later, he became rigid and then began to slump. Watch Mukasey's speech and collapse »

As Mukasey began to collapse, two people grabbed him and laid him on the stage. On a tape of the speech, a voice be heard saying "Oh, no oh! Oh my God!"

He was given medical attention on stage by a woman and three men before he was rushed to the hospital. EMS personnel arrived on the scene less than 15 minutes after his collapse. Watch update on Mukasey's condition »

Before the EMS arrived, one man is heard asking people to please stay in their seats. In the background, a voice is heard saying "bring his feet up." While Mukasey was being attended to, the audience remained seated and quiet.

Outside the hotel, police cars rushed to the scene. Moments later, a fire truck arrived and then an ambulance.

White House deputy press secretary Tony Fratto told CNN that President Bush has been informed of the situation and has Mukasey in his "thoughts and prayers." Watch Jeffrey Toobin's comments on Mukasey »

As he approached the podium and during the bulk of his appearance, Mukasey showed no signs of ill health.

During his speech, he praised the administration for "nothing less than a fundamental reorganization of our government" after the 9/11 terrorist attacks and blasted the "relentless critics of the very policies that have kept us safe."

Early in his speech, Mukasey noted Supreme Court justices were in attendance, and he praised John Roberts and Samuel Alito as "remarkably accomplished justices."

His speech was punctuated several times by applause from the audience.

Mukasey is a retired federal judge appointed to the bench by President Ronald Reagan.

He was nominated as attorney general by President Bush in September 2007 and was confirmed by the Senate in November 2007.

As a judge, Mukasey ruled that the U.S. government's detention of "dirty bomb" suspect Jose Padilla was constitutional, but that he must be allowed to meet with his attorneys.

During his attorney general confirmation hearings, Mukasey said he would make legal decisions based "on facts and law, not by interests and motives."

Mukasey also said he would resign from office if faced with a presidential order he believed was unconstitutional.

U.S. Jobs Even Weaker Than Feared

Europe Slides On U.S. Jobs Data

Sovereign Funds' $2 Trillion Setback

Hedge Fund Exit Strategies

IMF: Global Growth Sloooows

Wall Street bounced back from two days of heavy losses Friday, despite the worst reading on the job market in recent memory.

The Labor Department reported unemployment surged to a 14-year high of 6.5% in October, passing the peak of 6.3% seen after the economy's last recession in 2003, while nonfarm payrolls shed 240,000 jobs, worse than expected. Even more disconcerting was the revision to September's data on job losses, which had initially shown 159,000 lost jobs but was revised to up to 284,000.

Friday's dismal report comes on the heels of several other indicators that paint a gloomy picture for the U.S. economy. Gross domestic product shrank 0.3% in the third quarter, its first contraction since 2001, and appears unlikely to recover soon. Analysts expect a wider decline in the next two quarters; Goldman Sachs is projecting GDP to come in at -3.5% in the fourth quarter and -2.0% for the first quarter of 2009. The firm also predicts unemployment will jump to 8.5% by the end of next year.

The declines in economic growth come as U.S. consumers pull back on their spending, which could spell disaster for retailers. According to data released earlier in the week, retail chains recorded their worst same-store October sales since at least 1969.

Despite the warnings signs for the U.S. economy Wall Street ran out to morning gains on Friday, thanks in large part to the heavy declines of the two prior sessions. Optimism for further government intervention in markets, like rate cuts from the Federal Reserve, may also have had a hand in the rally. Goldman Sachs predicts the Fed will cut its benchmark interest rate by another half point, to 0.5%, by the end of the year.

The Dow Jones industrial average picked up 193 points, or 2.2%, to 8,889 by mid-morning; while the S&P 500 added 20 points, or 2.2%, to 925; and the Nasdaq 39 points, or 2.4%, to 1,647.

The glut of bad news for the economy comes at an inopportune time for president-elect Barack Obama. With the early days of his presidency already handcuffed by the Treasury Department's financial rescue plan and other government programs instituted before his Election Day win, Obama is also being asked to set the country's direction earlier than virtually every other president-to-be in history.

From his choice of treasury secretary to his support for another congressional stimulus package, every move Obama makes between now and Inauguration Day is likely to substantially impact financials. Obama, huddling with economic advisers Friday, is expected to hold a press conference to discuss a policy plan later in the day.

One major hurdle that Obama will need to clear will be determining whether to aid the ailing U.S. automotive industry. The chief executives of Detroit's Big Three were on Capitol Hill Thursday to meet with House Speaker Nancy Pelosi and other lawmakers. They have been pushing for loan packages that will enable them to retool for production of more energy-efficient vehicles and cope with their health care and pension obligations.

Ford Motor (nyse: F - news - people ) recorded to beat third-quarter revenue estimates when it reported earnings early Friday, but its cash burn rate accelerated rapidly to $7.7 billion in the quarter. If the pace keeps up, and the automakers don't get the federal aid they have been requesting in time, Ford's $18.9 gross cash will only last into April 2009. Despite the dangers lurking, Ford shares added 1.0% Friday. Rival General Motors (nyse: GM - news - people ), is also burning cash at a quicker pace, to the tune of $6.9 billion in the third-quarter, according to its earnings report. With cash and other readily-available assets of $16.2 billion, GM, like Ford, has enough on hand to last into April at its current burn rate. GM shares were halted prior to its release, but were up 0.6% before being put on hold.