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DETROIT (Reuters) -- Shares of General Motors jumped 33 percent in trading today after reports the automaker had been in merger talks in recent weeks with smaller rivals Ford Motor Co. and Chrysler LLC.

Analysts were skeptical that GM could achieve substantial savings from a merger.

But a deal with Chrysler might allow the top U.S. automaker to boost its cash holdings, reassure consumers that it was not going out of business and give it bargaining power to seek new concessions from the UAW, they said.

Shares of GM, which had traded near 60-year lows last week, jumped to $6.52, up from a close of $4.89 on Friday. The gains came amid a rebound in the broad market tied to steps by the U.S. government and others to stabilize the banking system.

The Dow Jones Industrial Average rose a one-day record 936 points, or 11.1 percent.

A merger between GM and Chrysler would be unlikely to produce major savings for their combined auto operations but could benefit stronger suppliers, Calyon Securities analyst Mark Warnsman said.

GM and Cerberus Capital Management have had discussions about a deal that would combine the No. 1 and No. 3 U.S. automakers, people familiar with the talks said over the weekend.

Those talks hit a snag over the question of how to value Chrysler, the sources said. Cerberus bought an 80-percent stake in the automaker for about $7.4 billion from Daimler AG in 2007, but auto sales have dropped sharply since.

The Standard & Poor's ratings service, in the wake of the news, raised concerns about both parties.

"Our most serious concerns regarding Chrysler are more immediate: the pressure on the company's liquidity during 2009 from the rapidly weakening state of most global automotive markets and the constrained state of the capital markets," S&P said in a statement.

"We believe that a GM-Chrysler combination or alliance could create substantial cost savings, but massive execution risks would also result.

"We would be skeptical that a GM-Chrysler transaction could easily address our primary concern by resulting in a substantial increase of current liquidity for the parties involved."

Warnsman said the winners from any such dealer could be suppliers rather than the merged auto companies.

"We are skeptical of major incremental savings resulting from a combination," Warnsman said. "The major costs are in the manufacturing, engineering and marketing capacity required to support too many brands. We do not see a combined company as being more effective in reducing those structural costs than two stand-alone enterprises."

GM's key consideration in any deal would be its impact on the automaker's cash position, Warnsman said. GM might benefit from an acquisition of Chrysler if the deal helped to reassure U.S. consumers about the staying power of its brands.

"The greatest near-term risk to GM, in our view, is that consumers stop buying its products for lack of confidence in, among other things, the warranties behind the vehicles," he said. "By joining with Chrysler, GM could reinforce its market-leading position in the U.S., potentially reducing the risk of lost consumer confidence."

But Warnsman said a combined GM-Chrysler would also be likely to promote "a more orderly wind-down of non-productive assets" in the auto component supply base.

"Thus, while this combination might improve GM's chances, it would also, we believe, help dissipate the cloud that presently hangs over even the healthiest North American suppliers," he said.

Warnsman said Johnson Controls Inc. and Gentex Corp. could stand to benefit from a merger of Chrysler and GM.

Here are some of the other analysts' reactions so far today:

• Aaron Bragman of Global Insight Inc.:

"The benefits of such a merger are, on the surface, slim for both GM and Chrysler. Both companies have significant and similar problems (too many dealers, damaged brands, falling sales, overcapacity, inability to raise capital) that combining forces will simply not cure.

"The real winner in any merger between Chrysler and GM: Cerberus, which has reportedly requested full ownership of GMAC in exchange for Chrysler."

• Himanshu Patel of JPMorgan Chase & Co.

"It is not clear from media reports if any financial consideration would be paid by either party in this potential deal, but our initial sense would be that GM should be compensated by Cerberus in such a transaction as GM's 49 percent GMAC stake would be worth $3 billion if it was valued at 75 percent of second quarter-ending book excluding Rescap (or 50 percent of book including Rescap), while Chrysler-auto is arguably nearly worthless on a stand-alone basis.

"While a $3 billion payment for 49 percent of GMAC may sound optimistic when one considers GM's supposedly weak bargaining position, it is worth considering that a transaction that involves Chrysler auto being sold has value to the owner of Chrysler finance (Cerberus) if the auto company's chances of remaining a going concern are increased, which such a transaction probably achieves.

"From GM's perspective, two perhaps overlooked motivations for doing a Chrysler acquisition, despite its obvious risks, may be a) UAW concessions, and b) perhaps, counter-intuitively, liquidity.

"If GM is deemed to be 'saving' Chrysler, GM's leverage with the UAW could rise considerably."

Philip Nussel contributed to this report