YAHOO [BRIEFING.COM] : Stocks settled with solid gains on Wednesday following a volatile session as traders digested news that an agreement had been reached over a potential aid package for the struggling U.S. automakers.

The S&P 500 traded with a gain of as much as 2.2%, fell to a loss of 0.4% with about two hours left in the session and then a broad-based recovery effort helped the index settle with a gain of 1.2%.

The White House confirmed that it has reached an agreement with congressional Democrats on a $15 billion aid package for U.S. automakers. The White House called the aid either a bridge to viability or a bridge to bankruptcy.

The deal depends on the automakers having a plan in place that shows long-term viability by March 31. If the companies are unable to prove their long-term viability, the government will ask for its money back and the automakers will likely have to enter bankruptcy protection. It's been reported that General Motors (GM 4.58, -0.12) and Chrysler will be receiving the initial aid, as Ford (F 3.21, -0.02) is currently in a better financial position.

Some enthusiasm faded after several Republican lawmakers expressed opposition to the deal.

On a related note, GMAC, GM's 49% held finance arm, said that it failed to meet the capital requirements to become a bank holding company. It is attempting to convert to a bank holding company to obtain greater access to funding. GMAC said if it is unable to successfully convert to a bank holding company it would have a material adverse effect on GMAC's business, results of operations and financial position.

As a whole, news has leaned negative this session. Electronic Arts (ERTS 17.00, -2.35) said its fiscal year 2009 earnings and revenue will come short of its previous guidance, meaning its earnings and revenue will miss the consensus estimate. Eastman Kodak (EK 6.59, -0.61) withdrew its fiscal year 2008 guidance. Rio Tinto (RTP 93.83, +20.74) is cutting as much as 5,500 jobs or 12% of its workforce and 8,500 contract workers. Office Depot (ODP 2.66, +0.23) plans to close 112 underperforming retail stores in North America over the next three months, which marks about 9% of its North America store base.

Meanwhile, AIG (AIG 1.74, -0.19) may owe $10 billion to Wall Street firms due to speculative trades, according to The Wall Street Journal.

Like stocks, crude oil had a very volatile session, with some of the action fueled by the government's weekly energy report. The data showed a smaller-than-expected increase in crude stockpiles, while gasoline inventories rose by a larger-than-expected amount. Crude settled with a gain of 4.3% at $43.89 per barrel after trading with a gain as high as 9.8%. Commodities as a whole rose 4.1%.

In the end, eight of the ten sectors advanced. The materials (+2.7%) and energy (+4.7%) sectors provided leadership thanks to the strength in commodities.

The financial sector underperformed. American Express (AXP 21.55, -1.74) saw selling pressure after being initiated with a Sell at both Citigroup and Banc of America.DJ30 +70.09 NASDAQ +18.14 NQ100 +0.8% R2K +2.3% SP400 +2.7% SP500 +10.57 NASDAQ Adv/Vol/Dec 1770/1.97 bln/973 NYSE Adv/Vol/Dec 2117/1.31 bln/952