GM and Ford rebound after prior day's drops
07-04-2008, 11:51 PM
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GM and Ford rebound after prior day's drops
NEW YORK (Associated Press) - Shares of both General Motors Corp. and Ford Motor Co. bounced a bit higher Thursday after dropping to record-low share prices the day before on worries about declining production and a possible bankruptcy filing at General Motors Corp. down the road.
In afternoon trading, GM shares rose 14 cents to $10.12 after jumping as high as $11 earlier in the day.
On Wednesday, GM shares tumbled $1.77, or 15.1 percent, to close at $9.98. Their session low of $9.96 marked their lowest point since Sept. 13, 1954, when they hit $9.92, according to the Center for Research in Security Prices at the University of Chicago. The price is adjusted for splits and other changes.
The drop came after a Merrill Lynch analyst cut his rating for GM to "Underperform" from "Buy" and slashed his price target for the company to $7 from $28, saying that "bankruptcy is not impossible" if the automotive market continues to get worse.
Himanshu Patel, an auto analyst with JPMorgan, said Thursday that the bankruptcy concerns are overbown. He said that GM is not in danger of an imminent bankruptcy but will need to raise about $10 billion in cash to weather the downturn in U.S. auto sales.
Meanwhile, Ford shares rose 6 cents to $4.42 after peaking at $4.53 earlier in the session. On Wednesday, Ford shares fell 35 cents, or 7.4 percent, to close at $4.36, passing a multidecade low of $4.41 set the day before.
In afternoon trading, GM shares rose 14 cents to $10.12 after jumping as high as $11 earlier in the day.
On Wednesday, GM shares tumbled $1.77, or 15.1 percent, to close at $9.98. Their session low of $9.96 marked their lowest point since Sept. 13, 1954, when they hit $9.92, according to the Center for Research in Security Prices at the University of Chicago. The price is adjusted for splits and other changes.
The drop came after a Merrill Lynch analyst cut his rating for GM to "Underperform" from "Buy" and slashed his price target for the company to $7 from $28, saying that "bankruptcy is not impossible" if the automotive market continues to get worse.
Himanshu Patel, an auto analyst with JPMorgan, said Thursday that the bankruptcy concerns are overbown. He said that GM is not in danger of an imminent bankruptcy but will need to raise about $10 billion in cash to weather the downturn in U.S. auto sales.
Meanwhile, Ford shares rose 6 cents to $4.42 after peaking at $4.53 earlier in the session. On Wednesday, Ford shares fell 35 cents, or 7.4 percent, to close at $4.36, passing a multidecade low of $4.41 set the day before.
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