In response to the announcement of the Treasury Department's plan to eradicate toxic assets from bank ledgers as well as an expansion of efforts to free up the market for asset-backed securities, auto stocks responded favorably and climbed throughout the day on Monday, March 23.

This response came in spite of the fact that the Term Asset-Backed Securities Loan Facility (TALF), with five times the original funding, does not enlarge the number of auto securities eligible to participate. A number of dealer groups and suppliers saw as much as a 10 percent climb in the value of their stock.

The TALF program will make loans available to investors, some of whom hole auto securities, but will not include loans and credit protection for securitized consumer loan bundles rated below AAA. That stipulation takes bundles of loans to subprime consumers and many floorplan lenders out of play.

In a story for Automotive News, David Cosper, vice chairman of Sonic Automotive Inc. and a former vice chairman of Ford said that calming the stalk market is the first step in restoring consumer confidence.

"Fear is a big factor affecting consumer confidence, and to the extent this action reduces fear, it is great for all of us," Cosper said . "Scared consumers tend not to make big ticket purchases. We like them calm and interested in new vehicles."