Ford shares plunged nearly 4 percent to a 21-month low after its April sales fell 7.1 percent, with demand soft for its passenger cars and unexpected weakness in light trucks. GM's stock dropped 2.7
"This has been ongoing since Q4 of last year, where the upward momentum just petered out," said Ward McCarthy, chief financial economist at Jefferies.
Sales for the industry were expected to be flattish in April
There was a slight drop in Treasury yields, which move opposite to prices, as the weaker car sales rolled in. The weakness is the first key consumer sales report for April, ahead of next week's retail sales report. The sales also follow last week's report of slower growth in consumption in the first quarter.
Economists have blamed some of the softening in vehicle sales on tighter credit after industry sales surged. The peak sales also came amid a period of heavy incentives coupled with looser lending standards and a high amount of subprime loan activity.