Dow turns negative after S&P cuts GM credit to junk
What a hit on the broadside. Not too many funds out there like holding junk bonds and GM has about $300 Billion worth. EDIT: Ford got downgraded to junk too.
By Tomi Kilgore
5/5/2005 12:54:54 PM
NEW YORK (MarketWatch) -- The Dow industrials turned lower in intraday trading after Standard & Poor's downgraded component General Motors credit by 2 notches to BB, or junk status, from BBB-. The Dow was last down 40 points at 10,345, after seeing gains of as much as 21 points earlier in the session. GM shares were last down $1.48, or 4.5% at $31.32, after being up 40 cents at its intraday high.
S&P cuts GM ratings to junk status, outlook negative
By Carolyn Pritchard
5/5/2005 12:49:29 PM
SAN FRANCISCO (MarketWatch)-- Standard & Poor's Ratings Services on Thursday cut its long- and short-term corporate credit ratings on General Motors Corp. , General Motors Acceptance Corp., and all related entities by two notches to "BB/B-1," or junk status, from "BBB-/A-3". The rating outlook is negative. S&P said the move reflects its conclusion that management's strategies may be ineffective in addressing GM's competitive disadvantages, though it notes that GM shouldn't have any difficulty accommodating its near-term cash requirements. The bid by Kirk Kerkorian's Tracinda Corp. to increase its ownership stake in GM represents an additional uncertainty, S&P said, but said this was not a factor at all in the current rating action.
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