April 28, 2009 (FinancialWire) (By Philip Holmes) — Stocks ended lower on Monday as news of a growing swine flu outbreak mixed with anxiety over the fate of the banks post stress-test. Meanwhile General Motors (NYSE: GM), a stressed-out builder of gas hogs, looks ready to metamorphosize into…something.

The Dow Jones industrial average shed 51.29 points to close at 8,025.00. The Standard & Poor’s 500 Index lost 8.72 points, to 857.51, while the Nasdaq Composite Index dropped by 14.88 points to end the trading session at 1,679.41.

Swine were on everyone’s mind. Forty human cases of swine influenza A virus infections have broken out in the U.S., and government officials declared a national health emergency Sunday. According to the World Health Organization, infections have been confirmed in Mexico and five states in the United States.

Governments around the world sprang into action on Monday, in an effort to contain the outbreak. The U.S. mobilized 12 million doses of flu-fighting drugs just in case. Investors stressed out and sold stock - which was a shame since biotech was looking good on the day.

And speaking of stress, BusinessWeek’s Adrienne Carter calls it “The $1 Trillion Question”: what will be revealed once the government finishes its stress testing of U.S. banks in May. Team Obama had been taking a “move along, nothing to see here folks” approach, but caved into pressure for more transparency in the process. Bank officials might feel the same way about this that Peggy Noonan feels about revelations of torture: that some things are better left in the dark.

According to Carter: “The stress tests measure how the banks will perform if unemployment rises to between 8.8% and 10.3% in 2010; the economy grows by 2.1% and 0.5%; and home prices drop by 4% to 7%.”

That seems fair given the latest projections, but according to most experts the banks will still need to raise more money even if economic performance rises to the top of those ranges. Balance sheets are way too damaged by what’s already happened, particularly in real estate. So, unless by some miracle house prices rise by a good bit, those “legacy assets” will still be weighing down the banks. They will need money and the public is in no mood for further bailouts.

Hang on, there’s still one left: GM. The struggling automaker is accelerating its cost-cutting measures, axing another 21,000 workers from its U.S. payroll and seeking to exchange notes for shares in an effort to make 90% cuts in around $27 billion of existing bond debt. Goodbye to Pontiac and Saturn, also.

The company is trying to stave off a Chapter 11 filing, but it ain’t looking good. Uncle Sugar will likely emerge as the majority owner of GM, and bondholders aren’t happy.

Well, let the bondholders exchange for 2% notes, with extended maturities, or give them all a free Aztec, or something.

The Investrend Earnings Calendar features Advent Software (NASDAQ: ADVS), expected at $0.25 a year ago versus $0.09 a year ago; Avery Dennison (NYSE: AVY), expected at $0.22 versus $0.8 a year ago; Ceradyne (NASDAQ: CRDN), expected at $0.2 versus $1.2 a year ago; OptionsExpress (NASDAQ: OXPS), expected at $0.23 versus $0.38 a year ago.

The Investrend Economics Calendar lists Weekly Chain Store Sales (8:55 a.m.), Consumer Confidence Index for April (9 a.m.), 2-Day FOMC Meeting Begins, Treasury auctions 5-year notes (1 p.m.).

The Investrend Events Calendar showcases BBT Shareholders Meeting; CB Shareholders Meeting; FO Annual Shareholders Meeting; FOMC Meets; GES, KMX, COH, CAKE at Barclays Capital Retail and Restaurant Conference; X Shareholders Meeting.

The Investrend Money Index is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ 50 Most Actives indicate the direction in which the mass of money is flowing. Last session’s trading showed 15 advancers versus 33 decliners and two unchanged. Advancers were led by Novavax, Inc. (NASDAQ: NVAX) up 79.58%, Gen Motors (NYSE: GM) up 20.71%, Ultrashort Real Esta (NYSE: SRS) up 10.52%, Financial Bear 3x (NYSE: FAZ) up 7.51%, Dendreon Corporation (NASDAQ: DNDN) up 7.32%. Decliners followed Host Hotels & Resort (NYSE: HST) down 14.87%, Ual Corporation (NASDAQ: UAUA) down 14.33%, Ultra Real Estate Pr (NYSE: URE) down 10.77%, Huntington Bancshares Incorpora (NASDAQ: HBAN) down 8.33%, Financial Bull 3x (NYSE: FAS) down 7.80%, Las Vegas Sands Corp (NYSE: LVS) down 6.87%, Dryships Inc. (NASDAQ: DRYS) down 6.18%.

Vote in the Investrend Poll Question of the Day at Investrend Information (http://www.investrendinformation.com).

Investrend Website of the Day: http://msmvps.com/blogs/spywaresucks/default.aspx

Quote of the Day: “Until I feared I would lose it, I never loved to read. One does not love breathing.” Harper Lee

Today is: Workers Memorial Day.

Happy Birthday: James Monroe, Lionel Barrymore, Carolyn Jones, Ann-Margret, Marcia Strassman, Jay Leno, Mary McDonnell, Paul Guilfoyle, Hal Sutton, John Daly, Penélope Cruz, Jessica Alba.

Today in History: In 1788, Maryland becomes the seventh state to ratify the Constitution of the United States. Pi Beta Phi Fraternity for Women was founded in 1867 at Monmouth College in Monmouth, Illinois. The first night game in organized baseball history took place in 1930 in Independence, Kansas. Thor Heyerdahl and five crewmates set out in 1947 from Peru on the Kon-Tiki to prove that Peruvian natives could have settled Polynesia. Expo 67 opened in 1967 in Montréal, Québec, Canada. Near Maui, Hawaii, a flight attendant was sucked out of Aloha Flight 243, a Boeing 737, and fell to her death when an upper part of the plane’s cabin area rips off in mid-flight in 1988. After 6,137 performances, the Broadway musical A Chorus Line closed in 1990. Millionnaire Dennis Tito became the world’s first space tourist in 2001. Apple Computer’s iTunes Music Store launched in 2001, selling one million songs in its first week.

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