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Shares of Lions Gate Entertainment (nyse: LGF - news - people ) also fell after hours, down more than 4% on the idea that billionaire Carl Icahn could gain control of the boutique movie company. Fitch analyst Jamie Rizzo told investors that if Icahn’s latest move to buy up the company’s convertible bonds succeeds, he'll have "effective control." 

Anadys Pharmaceuticals (nasdaq: ANDS - news - people ) is heading higher after hours. Shares are soaring, up nearly 8% in extended trading, on word the company is in late-stage partnership discussions about its experimental hepatitis C treatment. Anadys reports five companies have conducted formal due diligence and a couple more are scheduled.

Shares of National Beverage Corporation (nasdaq: FIZZ - news - people ) jumped more than 6% after hours on an 11% rise in profits on higher sales in the third quarter. The company says consumers are focusing more on value today, which boosts demand for its Shasta, Everfresh and LaCroix drink brands.

And Comscore released its data on top search engines for February. No surprise. Google (nasdaq: GOOG - news - people ) is the No. 1 search engine--leading the U.S core search market last month with 63.3% of the searches conducted. Yahoo (nasdaq: YHOO - news - people ) was next with 20.6%, while Microsoft (nasdaq: MSFT - news - people ) held 8.2% of the market,

Ask Network--which has been tailoring its marketing toward the racing audience, with prominent ads during televised NASCAR races--is in fourth place with 4.1% of the searches. AOL rounds out the top five with 3.9%. Overall, Americans conducted 13.1 billion searches, down 3% from January.

The future of General Motors has been called into question. On Thursday, a regulatory filing revealed that accounting firm Deloitte & Touche, the company's auditors, have "substantial doubt" the disturbed automaker can stay in business.

General Motors (nyse: GM - news - people ) confirmed Tuesday that it's nearing a resolution for its parts marker Delphi, which has been floundering in Chapter 11 bankruptcy protection since 2005. (See "GM Steering Delphi Out Of Chapter 11.")

Shares of GM fell 12.7%, or 28 cents, to $1.92, in early-morning trading. Over the past year, its stock value has lost 91.7%.

GM recently received $13.4 billion in federal loans, and it's hoping for a total of $30.0 billion. During the past three years, it has piled up $82.0 billion in losses, including $30.9 billion in 2008.

Deloitte & Touche attributed its warning to recurring losses from operations, stockholders' deficit and an inability to generate enough cash to meet its obligations.

GM said that its future depends on successfully executing the viability plan submitted to the government in February to justify the loans. "If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code," the company said in the annual report.

The Associated Press contributed to this article.

Unless demand for cars can be revived, it may not matter how much fat GM and Chrysler cut.

Stocks faltered again in New York Wednesday, as investors wrestled with viability plans from two of Detroit's automakers, digested the Commerce Department's latest report on the housing market and mulled the Obama administration's housing market plan.

After Tuesday's close, Chrysler and General Motors (nyse: GM - news - people ) filed restructuring updates with the Treasury Department. The reports were a condition of a $13.4 billion loan package that the carmakers received from the government late in 2008. Both companies said they are making progress, but will need additional loans to outlast the downturn in consumer spending that has crippled domestic auto sales. GM, which said it could need more than $30.0 billion by 2011 in order to remain on pace for sustainable profitability by 2012, gained 6 cents, or 2.8%, to $2.24 Wednesday. (See "Loans Can't Bridge Detroit Disconnect.")

The major averages opened higher on a reflex to a steep drop Tuesday, but less than an hour into the session stocks had slipped back into the red. The Dow Jones industrial average was down 60 points, or 0.8%, to 7,493; and the Nasdaq fell 11 points, or 0.8%, to 1,459; while the Standard & Poor's 500 lost 7 points, or 0.9%, to 782, threatening to test its Nov. 2008 lows.

The Treasury offered an outline of the housing plan Wednesday morning, which includes additional preferred stock purchase agreements with Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ), help with refinancing and $75.0 billion for loan modifications that would include government subsidies for certain homeowners at risk of foreclosure. President Obama is due to explain the plan in Arizona later in the day. Earlier Wednesday, the Commerce Dept. said housing starts and completions were down sharply in January, as were permits for new building. (See "Fannie And Freddie Redux.")

Bond insurer MBIA (nyse: MBI - news - people ) announced it will split itself in two, establishing a separate public finance guarantee insurance company that will concentrate on municipal bonds. The move would shield the firm's muni bond business from its activities in structured finance and international bonds. Shares of MBIA gained $1.33, or 38.2%, to $4.81, early in the session.

Deere & Company (nyse: DE - news - people ) lost $1.66, or 5.0%, to $31.83, after the farm equipment maker's first-quarter earnings fell short of analyst expectations. On an encouraging note, Deere said it has not had trouble accessing credit to fund its own needs and financing for customers.

Federal Reserve Chairman Ben Bernanke will make a speech on the central bank's balance sheet in Washington Wednesday afternoon, and the Fed's minutes from its January monetary policy meeting will be released shortly afterward.

Thomson Reuters contributed to this article.

But now that the Bush administration has agreed to lend GM and Chrysler $17.4 billion to stave off bankruptcy, Mulally is running as fast as he can from those other guys. "We're in a different place," says Mulally, whose company had $19 billion in cash on Sept. 30 and isn't seeking an immediate cash infusion.

Don't be so sure. Ford, which lost $8.7 billion through September, may yet need taxpayer money. It is burning more than $2 billion a month and has asked for a $9 billion line of credit as a safety net in case industry conditions worsen. And it's looking more and more like Ford will need it.

Ford's financial projections are based on a rosier industry sales forecast--12.5 million vehicles (including heavy trucks) in 2009 and 14.5 million in 2010--than most industry experts predict. JD Power & Associates is forecasting 11.4 million light-vehicle sales in 2009 and 13.6 million for 2010.

IHS Global Insight is even more pessimistic. It now forecasts sales of 10 million to 10.5 million light vehicles for 2009, and 12.5 million units for 2010. GM's best case scenario is 12 million units in 2009 and 14 million in 2010, though its business plan is based on more conservative estimates. Last year, the industry sold 16.1 million light vehicles.

If Ford's assumptions prove too optimistic--as is likely--it too will be approaching Uncle Sam for help. "All automakers, including Ford, are going to need government money," says IHS Global Insight analyst Rebecca Lindland.

Self-interest required Mulally to stand up for his weaker competitors. A collapse of one or both would hurt suppliers and could potentially bring down Ford as well. But in the meantime, Ford is shrewdly portraying itself as the healthiest U.S. carmaker and quietly stealing market share from its crosstown rivals. Ford gained 1.4 points of market share in November, while GM lost 1.6 points and Chrysler lost 2.3 points.\

Christmas comes early for GM and Chrysler with $17.4 billion in aid, but many questions remain.

The White House has given Detroit an early Christmas present. Friday, President Bush announced the Federal government will provide immediate financial assistance to General Motors and Chrysler, which warned that, without aid, they might go out of business by the end of the month.

"In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action," Bush said.

Under the terms of the deal, the companies will receive $13.4 billion in emergency bridge loans. The money will be doled out from the $700 billion Troubled Asset Relief Program which the Treasury has at its disposal to alleviate the credit crunch. The companies will be eligible to receive an additional $4 billion in February. The bridge loans are expected to keep the companies afloat until at least March 31. If they have not been able to work out a viable plan for restructuring by that date, the administration will be able to recall the loans.

Without providing many specifics, Bush stressed that all parties involved--management, labor unions, creditors, bondholders, dealers and suppliers--will have to accept "meaningful concessions." Any money distributed from the TARP kitty includes restrictions on executive compensation and the ability for the government to take equity stakes in a company receiving assistance. Bush said bondholders will be forced to swap debt for equity and that workers will need to accept compensation "competitive" with foreign automakers operating in the United States.

In a statement, GM said the loans "will allow us to accelerate the completion of our aggressive restructuring plan for long-term, sustainable success." Chrysler Chief Executive Robert Nardelli said that his company will receive $4 billion in immediate assistance, which will allow the company to "move forward with the restructuring and streamlining of our organization that we began in 2007."

Not everyone in Detroit is so happy. Rep. John Dingell, D-Mich., a staunch Capitol Hill ally of the automakers, applauded the government's bailout, but said "it is irresponsible during a time of economic crisis for the White House to insist that workers take further wage cuts on top of the historic concessions they have already made."

The administration's announcement comes barely a week after congressional talks to provide government assistance to the companies fell apart in the Senate. General Motors (nyse: GM - news - people ) and Chrysler were relying on the Bush administration as their last and best hope for a bailout. Ford Motor (nyse: F - news - people ), which had previous asked for a government-issued line of credit, was not seeking an immediate bridge loan.

Last-ditch efforts to forge an agreement to rescue the U.S. automakers fell apart late Thursday, Dec. 11, when union officials refused fast and deep cuts in worker pay. The collapse created the real possibility that General Motors (GM) and Chrysler will face bankruptcy in a matter of weeks, unless the Treasury Dept. acts to prevent it.

Senate Minority Leader Mitch McConnell (R-Ky.) said on the Senate floor Thursday night that a refusal of the United Auto Workers, headed by Ron Gettelfinger, to agree to lower wages and benefits at parity with workers at Toyota (TM) and Honda (HMC) in the U.S. by a date certain in 2009 was the last sticking point preventing Republicans from supporting the bill.

"We were three words away from a deal," said Senator Bob Corker (R-Tenn.), who spent all day trying to broker an agreement between Republicans, the union, and the auto companies. Tennessee is home to a GM and Nissan (NSANY) plant, as well as a future Volkswagen (VOWG.DE) plant and several supplier facilities.

Officials from the UAW did not return phone calls at press time.

"It's disappointing that Congress failed to act tonight," the White House said in a prepared statement. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."

"A Loss for the Country"

The Senate rejected the bailout 52-35 on a procedural vote after the talks collapsed.

Senate Majority Leader Harry Reid (D-Nev.) called the bill's collapse "a loss for the country," adding: "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

The bill called for $14 billion to be divided between GM and Chrysler, both of which are at the financial breaking point as the recession and consumer credit crunch have crippled their finances. The companies, anticipating failure in the Senate, have hired bankruptcy law firms. Ford (F) has said it doesn't need federal assistance now but has asked for a $9 billion line of credit in case sales deteriorate below the current level.

According to Corker, bond holders that conferred with lawmakers Thursday agreed to take a 70% writedown on debt they hold from the automakers, and to take half of the remainder in stock. GM has $42 billion in debt, not counting payments the company must make to the union's health-care trust in 2010. As part of the deal, the UAW also agreed to take half of its future $21 billion in payments to its health-care fund in stock. "The companies would have been stronger than they have been in 40 years, or headed for Chapter 11," said Corker.

Senator Debbie Stabenow (D-Mich.) took a harsh and emotional tone with Republicans who voted against the bill. "Evidently the only thing that matters to those on the other side of the aisle is that workers make too much money," she said.

The House may have passed a rescue package for the auto industry, but Senate Republicans could stop it cold.

One of the chief architects of a plan to bail out the Detroit auto companies said today that General Motors Chairman G. Richard Wagoner should be forced to give up his post as a condition of receiving emergency loans from the federal government.

General Motors, Ford Motor and Chrysler's desperate pleas for government aid were heard. Over the weekend, legislation to provide the big three with short-term loans to get them through the new year is being drafted, following an agreement between Speaker of the House Nancy Pelosi and President George Bush on how to fund the rescue.

Pelosi on Friday agreed to go the White House route and use loans from the Department of Energy originally intended to insure the companies would develop green cars in the future, rather than tap Treasury Secretary Henry Paulson's $700 billion Troubled Asset Relief Program funds.

Mark Zandi, the chief economist of Moody's Economy.com told the Senate that an automaker's bankruptcy would be "cataclysmic." With unemployment at 6.7%, gross domestic product in a tailspin and the banking sector wobbling like a newborn doe, the White House and Congress remain understandably averse to cataclysms.

"We must first prevent additional job loss from occurring. We cannot let the auto industry collapse, which would be catastrophic to our economy," said a Friday statement from Sen. Chris Dodd, the chair of the Senate Banking Committee, signaling his support.

President Bush's remarks Friday were much the same: "It is important that Congress act next week on this plan. And it's important to make sure that taxpayers' money be paid back if any is given to the companies."

It's a much better outcome for the automakers than after their first trip to Capitol Hill, where they flew in on private jets, presented vague plans and were sent home empty-handed. But before Detroit starts cheering, they'd be smart to recall a similar situation a couple months ago. If the $700 billion bailout of the financial system holds any lesson it's this: The car companies are not out of the woods yet.

Paulson's request for $700 billion two and a half months ago is fresh in the minds of those on Capital Hill. Deny him the money, he said, and the economy would implode. Any future economic problems (which by September were inevitable) could be blamed on the inaction of Congress. Despite the threat of apocalypse, they balked for two solid weeks as volleys of constituent disapproval filled the e-mail inboxes of Congress. At one point, the House's Web server crashed from the load. He ultimately got his money, but only after a political brawl unparalleled in recent memory.

America's automakers may be even less loved than America's bankers. All of this has the strong ring of deja vu, and just as rank and file Congressmen balked at bailing out Wall Street, embarrassing party leaders and forcing a dramatic showdown on the Hill, the deal for Detroit is far from done. The challenge is not writing the legislation this weekend. It's getting it passed next week. Are Pelosi and the Democrats up to the challenge? Detroit sure hopes so.