After enduring months of unending decline, shares of General Motors and Ford Motor Company closed up by more than 15 percent as oil fell by over US$10 per barrel in the past 48 hours.Oil prices declined on news of higher domestic inventories of crude oil and gasoline from the US Department of Energy. Prior reports indicated that inventories would continue to decline over the summer.
The recovery of GM's share price comes a day after CEO Rick Wagoner's restructuring plan aimed at raising US$15 billion in capital to survive what the company expects to be their worst sales year in a decade.
Further bucking the bear market, today's gains came despite credit rating agencies downgrading or threatening to lower their ratings for each automaker.
Moody's Investors Service announced it would review its ratings on Ford, while Fitch Ratings on Tuesday downgraded GM to B-minus from B.
Both agencies cited a gloomy forecast for automakers in an already slow sales year.
The following suppliers and dealership groups also posted gains in afternoon trading today:
Dealership groups:
• AutoNation Inc.: $8.00, up 5.6 percent
• Penske Automotive Group Inc.: $12.50, up 5.8 percent
• Sonic Automotive Inc.: $8.89, up 5.9 percent
• Group 1 Automotive Inc.: $16.19, up 7.3 percent
Suppliers:
• Johnson Controls Inc.: $29.61, up 4.0 percent
• Lear Corp.: $14.97, up 7.7 percent
• Dana Holding Corp.: $6.56, up 7.5 percent
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