GM, Ford Shares Decline Ahead of June Sales Report
Shares of General Motors
"It's just negative momentum. A belief that car sales would be very weak in this environment," said Tim Ghriskey, chief investment officer at investment firm Solaris Asset Management.
Options strategist Frederic Ruffy at Web information site WhatsTrading.com said GM's stock is also down amid concerns about energy prices and the automaker's financial problems.
U.S. automakers including GM and Ford were expected to post double-digit decline in U.S. sales in June when they report monthly sales on Tuesday.
Overall industry-wide sales were forecast to drop to a 15-year low as record gasoline prices sapped demand for large trucks and SUVs.
Forecasts for the annualized sales rate range from 12.5 million units to 13.7 million units, compared with 14.3 million in May.
GM is expected to post a drop of more than 15 percent, with Ford sales seen down as much as 17 percent.
Sales at Chrysler are expected to be down nearly 23 percent, according to analyst forecasts.
GM shares fell as low as $10.57 on Monday, their worst level since 1954, before recovering some ground to be down 47 cents, or 4.1 percent, at $11.08 in afternoon trading on the New York Stock Exchange. The stock has now lost more than half its value since the start of the year.
Ford shares were down 3.4 percent to $4.81 in afternoon trading on NYSE after touching a low of $4.46 earlier in the session.
GM shares extended a decline from Thursday when they fell more than 10 percent on rising concerns about the automaker's liquidity as the U.S. auto market reeled from record gasoline prices and the impact of a housing slump and tighter credit.
For its part, privately-held Chrysler had to deny rumors it was facing a cash crunch In a recent study of the U.S. automotive pipeline, Merrill Lynch said Chrysler's model pipeline severely lags the industry, which is a precursor to a break-up or sale.
Chrysler, acquired by private equity group Cerberus Capital Management [CBS.UL] last year, has seen its U.S. sales drop 19 percent so far this year -- the largest drop for any major automaker as it struggled with a product line-up that relies heavily on gas-hungry SUVs and trucks at a time when U.S. consumers are flocking to more fuel-efficient cars.