General Motors Co.'s shares rose a modest 3.6% Thursday

The stock opened at $35, a 6% rise on the IPO price, climbing to an intraday high of $35.99, up 9%, before settling at $34.19 in 4 p.m. composite trading on the New York Stock Exchange.

'The GM IPO is a feather in the government's cap,' said Todd Colvin, vice president at MF Global, alluding to the U.S. Treasury's bailout of the auto maker last year. 'There's a bit of elation out there surrounding the stock. But now we're at a realization stage: can the auto maker sell cars and turn a profit? Those have to be the two questions on every investor's mind right now.'

Meanwhile, in Washington, President Barack Obama hailed the resurgence of GM and its return to the stock market, saying one of the 'toughest tales of the recession took another big step toward becoming a success story.'

'Two years ago this seemed impossible,' the president said. 'In fact there were plenty of doubters and naysayers who said it couldn't be done, who were ready to throw in the towel and read the American auto industry last rites.'

GM in its Wednesday IPO sold more shares than expected at a higher price than originally planned. While the move underscored how much more favorably investors view the company after its dramatic, U.S.-financed bankruptcy reorganization last year, it caused some concern that any first-day gains might be sucked out of the stock sale. That could indicate the company overreached in its pricing.

Earlier this week, GM raised the number of common shares in the offering to 478 million from 365 million, and boosted its price range to $32 to $33 from $26 to $29, ultimately raising $15.8 billion through the common shares in its offering, or 50% more than it had hoped for.

Underwriters aimed to keep GM's first-day 'pop' at 10%, give or take two percentage points. Though investors have come to expect bigger pops─in recent months stock sales have gone as high as 40% to 50% on their first trading day─bankers were dealing with a most unusual seller, the U.S. government.

Unlike private-company IPOs, where the selling company often is willing to sell at a deeper discount to ensure a good first-day send-off for the shares, the U.S. Treasury, the biggest owner of GM, wanted the maximum amount possible for its investment, which was financed with taxpayer dollars. There was concern that politicians and Wall Street would be criticized for leaving money on the table if the stock soared too high.

None of the money from the common-stock portion of the sale will flow to the car maker. The majority of the shares─358 million, or 412 million with an 'overallotment' option that allows the banks to sell additional shares─came from the U.S. Treasury, which took a controlling stake in GM as part of a taxpayer-financed bailout last year.

Through the sale, the Treasury reduced its stake to 37% from 66%, and it could go as low as 26% if the overallotment shares and warrants are exercised. It expects to further cut its ownership in future follow-on sales after a six-month 'lockup' period.

Along with the common stock offering, GM raised $4.35 billion in a preferred-stock sale that will go into the Detroit auto maker's own coffers. But that amount will quickly flow out again: GM plans to use the proceeds to buy back a separate tranche of preferred stock from the Treasury and to make a cash contribution to its union's pension plan.

If underwriters exercise their right to sell an additional 71.7 million shares in the overallotment, the total common stock sale could hit $18.1 billion, making it the second-largest U.S. IPO in history, after Visa Inc.'s $19.7 billion sale in 2008, according to Dealogic. Globally, GM's sale would be the fifth-largest IPO.