Auto stocks skidded Thursday after Morgan Stanley cut its sales and earnings outlook for major U.S. auto makers.
Morgan Stanley lowered its 2008 U.S. industry sales forecast and said 2009 would be little improved. The brokerage also cut its earnings estimates, saying it now expects General Motors to post a loss for the year and projects a wider full-year loss at Ford Motor than previously forecast.
"Our industry view is based on expectations of lukewarm retail demand, weak mix, high raw material prices offset by growing strength in international markets and some progress toward attacking structural issues including overcapacity and legacy costs," Morgan Stanley said in a note to clients.
Morgan Stanley also cut estimates for Lear Corp., Magna International, and Superior Industries, all of which have a heavy exposure to U.S. auto makers' production.
The U.S. automotive sector is facing high gasoline prices, sagging consumer confidence and credit market tightness that has pressured sales.
GM also has had to contend with a strike at major supplier American Axle & Manufacturing Holdings and Delphi's struggle to emerge from bankruptcy.
GM and Ford were both down more than 4 percent.
Lear , American Axle also declined. The Dow Jones U.S. AutoParts Index was off nearly 4 percent at $172.27.