Market tanks, taking down auto stocks with it
Market tanks, taking down auto stocks with it
Ford hits lowest point since 1980s
Automotive News | October 6, 2008 - 1:39 pm EST
U.S. stock markets plummeted today before posting a modest recovery, sending Ford Motor Co. stock to its lowest price since the 1980s on an adjusted basis.
By midafternoon, the Dow Jones industrial average had fallen 800 points to 9,525 as part of a global sell-off spurred by fears of a global recession. After reaching its lowest point in nearly five years and setting a record for the largest single-day point drop, the Dow closed down 370 points, to 9,955.6.
In midmorning trading, Ford shares hit $3.32. Ford recovered by closing time to $3.69, a loss of 8.9 percent from the previous day’s closing. The company’s all-time low share price was $1.12 in 1981, spokesman Bill Collins said.
Ford stock went public in 1956 for $64.50 a share, but the company has seen many share splits over the years. In 2003, Automotive News reported one share bought in 1956 and kept all those years would have been worth $1,700 at the 2003 low price of $6.
Elsewhere in the market, General Motors stock fell 5.8 percent to close at $8.48. Shares of supplier Magna International Inc. suffered a 3.9 percent loss to $41.76. Lear Corp. stock fell 3.5 percent to $8.58 a share.
The stock of dealership group AutoNation Inc. fell 4.3 percent to $10.46, while Penske Automotive Group Inc. rose 14 cents to $9.97.
The chaotic financial markets’ damage to the economy will continue to affect the auto industry, said analyst John Casesa, a principal of the Casesa Shapiro Group in New York.
“With stocks down and banks unwilling to manage each other, businesses can’t get capital to make investments, to hire people,” he said. “And so to the extent that capital remains unavailable for investment or for consumer borrowing, fewer people will be able to buy cars.”
The lack of capital makes automakers’ restructuring efforts “almost impossible,” Casesa said.
“It puts the weakest companies — regardless of size — at a great deal of risk,” he said. “It’s a dire situation, worse than anything the industry has experienced probably since the 1930s.”
November crude oil futures on the New York Mercantile Exchange reached an eight-month low, closing down $6.07, to $87.81.
