[Pen-l] Dow falls below 9,000; GM stock hits lowest level since 1950

["Charles Brown" <charlesb@xxxxxxxxxxxxxxxxxxxxx>]

Thursday, October 9, 2008
Dow falls below 9,000; GM stock hits lowest level since 1950
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- Auto stocks continued their sharp slide Thursday, which
contributed to the Dow Jones Industrial Average falling below 9,000 for
the first time since 2003.

Investor worries about the credit market and the overall economy have
contributed to the overall decline.

General Motors Corp. shares fell as much as 22 percent to $5.42 at one
point today.

Ford Motor Co. also fell again Thursday, down as much as 9.8 percent to
$2.40 a share. GM stock was trading around $5.69 a share, down nearly 18
percent at 2:45 p.m.; Ford was at $2.39, down 10 percent.

Both companies shares have been hit hard in the past two weeks and the
dip in price of GM's shares to $5.42 was the lowest level it had fallen
since December 1950. GM was also hurt by news that its European sales
fell 1.9 percent to 1.62 million vehicles in the first nine months of
the year.

Analysts also said that both GM and Ford stocks were hurt by the
expiration of a temporary ban by the Securities and Exchange Commission
of "short selling" financial stocks. Short selling allows traders to
borrow shares betting that the price will decline so they can buy it a
lower price and pocket the difference. The ban expired at midnight
Wednesday.

GM and Ford were both on the list because of their financial interests.
Ford owns Ford Motor Credit and GM owns 49 percent of GMAC.

Since Sept. 30, Ford has fallen 53 percent.

Shelly Lombard, an auto analyst with Gimme Credit, issued a research
note on Ford Thursday titled "Penny Stock."

"Ford stock is now selling for pocket change," Lombard wrote. "It is,
of course, being dragged down by this bear market we're in as well as
the reality that, right now, most consumers are reluctant to buy a big
ticket item like a car or are unable to get financing. So Ford's sales,
both here and abroad, will decline and its operations will continue to
burn through cash near-term."

You can reach David Shepardson at (202) 662 - 8735 or
dshepardson@xxxxxxxxxxxx




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