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Stocks have ended a choppy day mixed as investors remain uncertain that a $17.4 billion lifeline for automakers will make a lasting difference for the beleaguered industry.

The Dow rose by as much as 182 points in the early going, turned lower at midday, recovered in the afternoon but then lost ground again in the last hour of trading.

Investors are relieved that the White House's efforts have staved off a bankruptcy that could have sent a blow to the economy, but they're worried that the conditions of the financing might be difficult for GM and Chrysler to meet.

At the close, the Dow is down about 25 points to the 8,579 level. The broader Standard & Poor's 500 index and Nasdaq composite index are up less than 1 percent.

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Wall Street barreled higher Monday in a relief rally over the government's plan to bail out Citigroup Inc. -- a move it hopes will help quiet some of the uncertainty hounding the financial sector and the overall economy. The Dow Jones industrials soared more than 500 points and the major indexes all jumped more than 6 percent, extending a steep rally that began Friday.

If the gains held in the final half-hour, the most volatile time of day on Wall Street, it would mark the first two-day gain since Oct. 30-31.

The advance comes even after the markets anticipated last week that some sort of rescue for Citigroup could occur. But investors nonetheless appeared emboldened by the U.S. government's decision late Sunday to invest $20 billion in Citigroup and guarantee $306 billion in risky assets.

Wall Street's enthusiasm surged not only because the bailout answered questions about Citigroup but also because many observers saw the move as offering a template for how the government might carry out other bank stabilizations.

The market rallied following announcement of the plan by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. to stabilize Citigroup. It's only the latest effort this year to support a banking system troubled by bad debt and flagging confidence. Besides implementing its $700 billion bailout plan for the overall financial industry, the government has bailed out insurance giant American International Group Inc. and taken over lenders Fannie Mae and Freddie Mac.

Jim Baird, chief investment strategist with Plante Moran Financial Advisors, said Wall Street was calmed by the government's decision to help prop up Citigroup but he predicted that the initial enthusiasm could give way to further questions about the effectiveness of the government's array of efforts to sew up problems in the financial sector.

"I think, at a minimum, what you're seeing today is some relief that, first of all, they're stepping in to do something," he said. "There's still more questions than answers surrounding whether what's been done is going be enough."

In the final half hour of trading, the Dow rose 518.03, or 6.44 percent, to 8,564.45.

Broader stock indicators also jumped. The Standard & Poor's 500 index advanced 62.12, or 7.76 percent, to 862.15, and the Nasdaq composite index rose 91.34, or 6.60 percent, to 1,475.69.

The Russell 2000 index of smaller companies rose 31.79, or 7.82 percent, to 438.33.

The rise in stocks follows a rally Friday that saw the Dow industrials jump 494 points, or 6.5 percent. The other major indexes also rose sharply. Still, stocks ended the week with a loss after heavy selling Wednesday and Thursday.

Lancz said Friday's rally and Monday's follow-up reflect a renewed sense that Washington is taking steps to help repair the markets and that the scope of selling for much of last week had left the market overdue for a rally.

"The market is looking for some stewardship. It's at least adding to the bleak confidence that investors have," he said, referring to the Citigroup plan as well as the overtures of the still-forming Obama administration.

Bond prices were mixed Monday as investors examined the government's bailout plan for Citigroup. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.36 percent from 3.20 percent late Friday.

The Treasury bill market showed continuing high demand, a sign of investors' caution. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.02 percent from 0.04 percent late Friday.

The dollar was mostly lower against other major currencies, while gold prices rose.

Light, sweet crude rose $4.61 to $54.54 on the New York Mercantile Exchange.

Despite Mondy's gain, Baird said the uncertainty over whether the government's cocktail of direct investments in financial houses and support of debt obligations will prove effective has led to the stock market volatility. The concerns about banks and the broader economy are likely to continue, he said.

"Just the sheer breadth of potential outcomes is very, very wide which I think makes it difficult for investors to determine how do you play it from here."

Stocks briefly came off their highs of the session in the middle of the session, with the Dow Jones industrial average paring its gain from 300 points to 200 points, as President-elect Obama formally named his economic team but didn't offer specifics of an economic stimulus package nor state that he would push back a plan to raise taxes on the richest Americans. He reiterated his goal of creating 2.5 million jobs during the next two years.

Alan Lancz, director at investment research group LanczGlobal, said that while the market might have wanted a firmer commitment against raising taxes, it was too soon for Obama to outline specifics. Lancz expects the new administration wouldn't rush to implement the hikes if the economy appeared too weak.

"There's so many balls in the air right now he'd be foolish to make specific comments," Lancz said, noting that the economic picture could change greatly by Inauguration Day, which is Jan. 20.

Wall Street shrugged off a larger-than-expected drop in sales of existing homes last month as investors instead focus on the government's plans for the financial sector. And while the housing numbers fell short of expectations, Wall Street expected sales would fall sharply after last month's upheaval in the financial markets.

The National Association of Realtors says sales of existing homes fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million in October. That's down from 5.14 million in September.

The financial sector led Monday's advance, fueled by a sense that the government might be developing a more nuanced yet ready-to-apply medicine for financial firms. Citi surged $2.21, or 59 percent, to $5.98 following the government's decision to inject capital into the company. Bank of America rose $2.89, or 25 percent, to $14.37, while JPMorgan Chase & Co. rose $4.33, or 19 percent, to $27.05.

Advancing issues outnumbered decliners by about 8 to 1 on the New York Stock Exchange, where volume came to 1.24 billion shares.

Overseas, Britain's FTSE 100 jumped 9.84 percent, Germany's DAX index surged 10.34 percent, and France's CAC-40 rose 10.09 percent. Hong Kong's Hang Seng index fell 1.59 percent; markets in Japan were closed for a holiday.

Wall Street headed toward a lower open Wednesday, as investors try to assess how bad the global economic slump is and worry about the trend in consumer spending.

The market, which fell for the second-straight session on Tuesday, will get an update from Treasury Secretary Henry Paulson on the government's financial rescue package at 10:30 a.m. EST. There are no major economic reports due to be released during the session.

There was fresh evidence that the financial crisis is causing consumers to tighten their purse strings.

Department store operator Macy's Inc. reported a loss of $44 million for the third quarter as results were weighed down by charges related to a consolidation of several divisions. The consumer electronics chain Best Buy Co. cut 2009 guidance on fears that consumer spending will erode even further.

A big drop in consumer spending is a major concern since it drives more than two-thirds of the U.S. economy. Investors are also awaiting the government's retail sales figures on Friday and earnings from Wal-Mart Stores Inc. on Thursday.

Battered shares of the top U.S. automakers might again come under pressure. House Speaker Nancy Pelosi wants Congress to support a financial bailout for the troubled U.S. auto industry, which is suffering under the weight of poor sales, tight credit and a sputtering economy.

President-elect Obama, when he met with President Bush at the White House on Monday, urged Bush to support aid for struggling automakers, and Democrats in Congress have begun drafting legislation that would give General Motors, Ford and Chrysler access to $25 billion of the rescue funds.

Dow futures shed 59, or 0.69 percent, to 8,578. Standard & Poor's 500 futures dropped 4.60, or 0.52 percent, to 888.40. Nasdaq 100 index futures stumbled 10.20, or 0.84 percent, to 1,212.80.

On Tuesday, the Dow fell nearly 180 points as it became clearer to investors that it's going to be hard to rely on the average consumer to pull the economy out of its downturn. The market also closed lower amid similar concerns on Monday.

Government bond prices, which did not trade Tuesday because of Veterans Day, moved higher as investors looked for safer investments. The three-month Treasury bill's yield fell to 0.21 percent from 0.22 percent late Monday, and the yield on the benchmark 10-year Treasury note fell to 3.74 percent from 3.76 percent late Monday.

Lower yields indicate stronger demand.

Crude slipped below $59 a barrel Wednesday on the growing realization that global economic growth next year will slow more than originally feared, cutting demand for crude products such as gasoline. Light, sweet crude was down 85 cents to $58.48 a barrel, after earlier falling as low as $58.55, in electronic trading on the New York Mercantile Exchange.

In corporate news, American Express Co. is said to be seeking about $3.5 billion from the U.S. government to help boost its balance sheet, according to a report in The Wall Street Journal citing people familiar with the situation. AmEx, the No. 4 U.S. credit card issuer, won approval Monday from the Federal Reserve to become a bank holding company.

Prudential Financial Inc. said late Tuesday its 2008 annual dividend will be roughly half of what it paid out to shareholders last year. The insurer said it will pay a dividend of 58 cents per share on Dec. 19 to shareholders of record at the close of business on Nov. 24. Last year, the company paid a dividend of $1.15 per share.

After the closing bell, semiconductor equipment maker Applied Materials Corp. and Computer Sciences Corp., an information technology outsourcing firm, are also set to report.

Overseas, Japan's Nikkei closed down 1.29 percent and Hong Kong Hang Seng fell 0.73 percent. In European trading, London's FTSE 100 was up 0.52 percent, Germany's DAX fell 0.22 percent, and France's CAC-40 added 0.11 percent.

Investors on Main Street have another reason to fear opening their brokerage statements: the rapidly shrinking hedge fund industry. In the coming months, hundreds of hedge funds may shut their doors, sparking a massive fire sale on all sorts of investments. Just about anybody with a 401(k) or pension plan will feel the pain, since the sell-off will only exacerbate the plunge in stocks, bonds, and commodities—which make up the core of most people's portfolios.

The 10,000 hedge funds with more than $1.7 trillion in assets are caught in a vicious cycle. Worried investors are pulling out their money—some $31 billion through September, according to Hedge Fund Research. As part of the great deleveraging that's happening across the financial system, lenders are cutting credit lines or demanding that funds come up with more cash in what's known as a margin call. The cash squeeze is forcing hedge funds to dump holdings. "Redemptions and margin calls are exaggerating the market swings," says Timothy M. Ghriskey, co-founder of Solaris Asset Management, a $2 billion institutional fund.

Meanwhile, the Lehman Brothers bankruptcy is tying up tens of billions of dollars of hedge fund assets. Scores of money managers parked cash and other securities at the investment bank's prime brokerage operation in accounts that are now frozen. Other hedge funds had derivative deals with Lehman, complex financial transactions that could take months to unwind.

Stay of Execution?

None of those problems will clear up any time soon. It's difficult for funds that are down 30% or more to raise new money, persuade investors to stay, or retain top talent—a fatal combination that will make it impossible for many funds to stay open in this environment. The next critical deadline: Nov. 30, the final day of the year that many hedge fund investors can file to redeem their stakes. Unlike mutual funds, which trade daily, hedge fund customers can request their money only on certain dates, typically once a month or quarter.

Clients of firms with long-term records of strong returns may decide to give the funds a stay of execution even if losses are huge. That's one reason why some hedge fund managers are pleading with their customers to stick around. Citadel Investment Group CEO Ken Griffin apologized for two funds' near-30% drop since the start of the year, promising "to create value over the years to come." Ramius Capital, down 11%, is trying to keep investors from rushing for the exits by cutting expenses, an unheard-of move in this fee-hefty business.

Despite such efforts, the wreckage is likely to be significant. Charles Biderman, chief executive of TrimTabs Investment Research, estimates that 25% of hedge funds will be out of business by the end of 2009. "When [managers] are losing money for people, [they] are not getting pleasant phone calls," says Sol Waksman, founder of industry tracking service Barclay Hedge. "Some ask, 'why am I doing this?'"

The favorite holdings of hedge funds will keep bearing the brunt of the pain from the shakeout. A Goldman Sachs (GS) index that tracks the top stocks held by hedge funds dropped by 34% over the three weeks ending Oct. 10, a period when managers were frantically selling shares. The Standard & Poor's 500-stock index, by comparison, fell by 28%. Among the biggest losers: Apple (AAPL), off 31%, and Freeport-McMoRan Copper & Gold (FCX), down 51%.

Since some hedge fund managers are selling indiscriminately, even relatively good companies can get hurt. Consider MasterCard (MA). The stock dropped 33% over that same three-week period, even though revenues were up 25% last quarter. Why is that? Hedge funds, which own roughly a quarter of the credit-card company's stock, may be putting additional pressure on the shares. One major shareholder, hedge fund Atticus Capital, has lost nearly $5 billion, or 20% of assets, since the start of the year—a steep drop that fueled speculation in September that the fund wouldn't be around much longer. Manager Timothy R. Barakett has publicly denied the rumors, insisting Atticus is in the market for the long haul.

Software provider TowerCare Technologies' Donna Myers.

David

Meet the new breed of angel-backed entrepreneur. Donna Myers, president of software provider TowerCare Technologies, is in the process of securing $2 million in angel funding. But she's no newbie: Her 22-person Wexford (Pa.) company has 160 customers and last year generated $500,000 in sales.

In years past, a firm of Myers' size might have sought venture capital. But as venture capital funds have moved upstream, doing larger deals, angel investors are being pitched by much more established companies. Now it's not just first-time entrepreneurs or those whose companies are in their infancy who are winning cash from angels, although those entrepreneurs are still pitching. Increasingly, successful candidates, like Myers, boast impressive experience and a significant customer base.

"The bar has been raised," says Catherine Mott, who runs Pittsburgh's BlueTree Allied Angels, which expects to put $2.8 million to work in about a dozen transactions this year, up from $1.8 million in eight deals last year. Her group plans to fund three more deals by yearend and has the enviable problem of picking among a half-dozen promising companies. "We are seeing such great quality deals," Mott says. "Those six are going to be difficult to choose from."

More Pitches

Mott's isn't the only group being courted more fiercely. The Atlanta Technology Angels are seeing about 50% more pitches than they did a year ago, says Knox Massey, the group's managing director. James Geshwiler, managing director of CommonAngels in Lexington, Mass., says the number of proposals making it through his first cut jumped 36% in the first half of this year. Other groups are seeing smaller jumps: 10% at Wisconsin Investment Partners in Madison, 7% at Seattle's Alliance of Angels.

Angel groups are linking up to do bigger deals. According to Jeffrey Sohl, director of the University of New Hampshire's Center for Venture Research, the average angel deal in the first half of 2008 was about $540,000, up 8% from the same period in 2007. At the same time, some angels, rather than investing just in new companies, are also continuing to make big bets on companies they invested in earlier, says Sohl. That makes true startup dollars even harder to come by.

With the number of active angels jumping 10% in 2007, to 258,200, you might think relief is on the way. But the amount invested last year rose just 1.8%, to $26 billion, Sohl's research shows. And he expects the dollars invested to hold steady this year. So the pursuit of angel dollars will only get tougher.

To hear what angel investors across the country say they are looking to invest in now, flip through this slide show.