GM shares fall; Dow sinks below 9,000
S&P's warning that it was reviewing General Motors credit rating for a possible downgrade sent the auto maker's shares down 30 percent and helped drag the Dow below 9,000. Steve Henn has more.
General Motors logo (gm.com)
TEXT OF STORY
Kai Ryssdal: Whether you're an investor or just an observer of American capitalism, General Motors is one of the grand old business names in this country. Its stock has been traded for what seems like forever. It's a Dow component, in fact. But after today's developments, there's real worry about what used to be the world's biggest car company.
From Washington, Marketplace's Steve Henn has the story.
Steve Henn: In 1929, just before the stock market crashed, General Motors was worth $4 billion. Today at the close of trading in New York, GM was worth less -- just $3.5 billion. General Motors shares fell more than 31 percent today alone and they've lost roughly half their value this week.
But the biggest blow came after Standard & Poor's warned it might downgrade GM's credit rating in the middle of a global credit freeze. The agency said GM has enough cash for the rest of this year, but 2009 could be a challenge.
GM lost $15.5 billion in the second quarter of this year. And it's U.S. sales are down 18 percent so far this year.
For months, GM's management has been focused on strengthening it cash position to whether this storm. But if consumer demand for automobiles dries up further, surviving could become much more difficult.
In Washington, I'm Steve Henn for Marketplace.
Comments
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From Los Angeles, CA, 10/11/2008
Unfortunately, bargains are not to be had everywhere.
From AK, 10/10/2008
The world's not coming to an end - it's bargain shopping time!
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