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Since GM gives rather large dividends (about 5% yield as of this writing) I would have thought that the announcement of Bush's new economic stimulus package (making dividends tax-free) would have sent GM soaring.

Does anyone know why it hasn't? Granted, the Bush plan hasn't yet been implemented, but even the presence of such a plan on the table should have done some good things for GM's share price, don't you think?
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No. of Recommendations: 1
Since GM gives rather large dividends (about 5% yield as of this writing) I would have thought that the announcement of Bush's new economic stimulus package (making dividends tax-free) would have sent GM soaring.

Does anyone know why it hasn't? Granted, the Bush plan hasn't yet been implemented, but even the presence of such a plan on the table should have done some good things for GM's share price, don't you think?


As you stated, the plan is not implemented yet. I think most higher yielding stocks received a price bump on the news, but do not expect a significant rise on the news of the plan alone. Some companies got a bigger bump than others.

Things that would help GM prop its price up would be:
a) Show that the pension plan underfunding will not significantly hurt future earnings.
b) Show sequential growth in sales and earnings (Good earnings news yesterday by the way).

The Senate and the House still have significant work on Bush's proposed tax bill. What comes out of congress might not resemble what Pres. Bush put on the table.

Chuck

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