GM rises on loan analysis

Shares of General Motors Corp. rose 11.6% Thursday after a Wall Street analyst said a $25-billion government loan package for the auto industry would “notably reduce bankruptcy risk” for the automaker.

JPMorgan analyst Himanshu Patel suggested the markets had not priced the chances of the loans passing Congress and winning approval from President George W. Bush. GM’s shares rose steadily throughout the day, closing up $1.33 to $12.75, while shares of Ford Motor Co. and parts suppliers also moved higher. Ford shares climbed 21 cents, or 4.7%, to $4.68.

Patel said even with the current limits on the loans, GM could be in line for up to $6 billion — about as much as it’s expected to burn in cash next year. Both presidential candidates back the loans, and Patel said his office had received several calls from government officials asking about the company’s finances.

GM Chairman Rick Wagoner was expected to discuss the loan push today during a Senate summit on energy. The proposal could face its highest hurdles in the Senate, where spending bills have been blocked by party infighting during the past few months.