GM, Ford close at 52-week lows on risk worries – USA TODAY

Posted: Tuesday, October 07, 2014

General Motors stock hit a new 52-week low Tuesday after Morgan Stanley said the automaker’s overseas risks are the same as those taking a big bite out of Ford Motor earnings.

Ford Motor likewise fell below its previous 52-week low point.

GM closed at $31.77, down $1.98 or 5.9% on a day major market indices were off about 1.5%.

That was less than the company’s $33 IPO price after its 2009 bankruptcy reorganization, and less than the previous 52-week nadir of $31.93.

Investors traded 25.5 million shares, nearly twice as many as the 13.2 million average the past 90 days.

Morgan Stanley analyst Adam Jones had cut his forecasts of GM earnings earlier Tuesday, and said the stock should be trading at $27, the apparent trigger of the stock-price slide.

He told clients, “We believe many elements from Ford’s recent profit warning are applicable to GM’s outlook through 2015 and beyond. At its investor day, GM understandably focused its attention on reestablishing cultural and strategic momentum.They didn’t warn, so we’re doing it for them.”

Ford’s new CEO, Mark Fields, disclosed late last month in his first investor-day briefing of analysts that the company will make significantly less this year than forecast, but will begin to rebound next year.

CFO Bob Shanks said Ford will lose about $1 billion this year in South America, far more than previously forecast, and lose $300 million in Russia, also an unexpected jolt.

Overall, Ford earnings in 2014 will be $6 billion, not the $7 billion to $8 billion it had predicted previously, the company said.

Investors continue to punish Ford more than a week later.

Ford shares closed at a new 52-week low — $14.10, down 42 cents or 2.9%, and below the previous low of $14.40.


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