General Motors (GM) shares fell more than 30% Thursday after Standard & Poor's Ratings Services said it's placing the automaker's credit ratings under review for possible downgrade.
S&P said Thursday that the move reflects the weakening automotive markets across the world and expectations that tight credit markets will make things tough for the near future.
GM shares fell $2.15, or 31%, to $4.76, helping drag the Dow Jones industrial average down by more than 600 points. That's the lowest price for GM shares since March 1950.
The ratings under review include GM's "B-" long-term corporate credit rating and its finance arm's "B-" long-term counterparty credit rating.
S&P says it believes GM has enough cash for at least the rest of 2008, but rapidly worsening industry conditions will make things tough in 2009.
Citigroup cut GM and Ford Motor (F) to "sell" ratings on Wednesday.
Thursday marked GM's fourth-straight day of losses. The automaker's shares are down about 35% from Friday's closing price of $9.
Analysts have voiced concerns in recent days that the ongoing slump in U.S. vehicle sales could last longer than they previously expected and could spread to other parts of the world, particularly Europe.
J.D. Power and Associates said Thursday that it now expects U.S. new vehicle sales to total 13.6 million units this year and 13.2 million in 2009.
The company had previously projected 2008 sales of 14.2 million units and 2009 sales of 14 million units. Last year, U.S. sales totaled 16.1 million units.
The company also forecast a slow down in vehicle sales growth in both China and India, along with a drop in European vehicle sales.
Ford Motor (F) shares also took a big hit Thursday, falling 58 cents, or 21.8%, to $2.08.