UPDATE 1GM Ford shares fall after Morgan Stanley cut
(Adds details on options activity, background, byline)
By David Bailey
DETROIT, March 13 (Reuters) - U.S. automotive shares fell
on Thursday, including as much as a 9 percent drop in General
Motors Corp (GM.N: Quote, Profile, Research), after Morgan Stanley cut its 2008 U.S.
industry sales forecast and said 2009 would be little better.
GM stock fell to its lowest level in nearly two years and
Ford Motor Co (F.N: Quote, Profile, Research) to a more than 16-year low after Morgan
Stanley cut its earnings per share outlook for GM to a loss for
the year from a profit, and widened its forecast full-year loss
for Ford Motor Co (F.N: Quote, Profile, Research).
“Our industry view is based on expectations of lukewarm
retail demand, weak (product) mix, high raw material prices
offset by growing strength in international markets and some
progress toward attacking structural issues including
overcapacity and legacy costs,” Morgan Stanley said in a note
to clients.
Morgan Stanley cut its 2008 U.S. auto sales forecast to
15.4 million vehicles, from 15.9 million vehicles, and
introduced a 2009 forecast of 15.8 million. Most analysts have
expected U.S. auto sales of about 15.5 million in 2008.
Also cut were estimates for Lear Corp (LEA.N: Quote, Profile, Research), Magna
International Inc (MGa.TO: Quote, Profile, Research), and Superior Industries (SUP.N: Quote, Profile, Research),
suppliers to the U.S.-based carmakers.
The U.S. automotive sector is facing high gasoline prices,
sagging consumer confidence and tightening credit markets that
are pressuring sales. An unexpected drop in a U.S. retail sales
report released on Thursday didn’t help, one analyst said.
GM also has had to contend with a strike at major supplier
American Axle %26amp; Manufacturing Holdings Inc (AXL.N: Quote, Profile, Research) and Delphi
Corp’s (DPHIQ.PK: Quote, Profile, Research) struggle to emerge from bankruptcy. Continued…
