By Jeff Bennett
DETROIT--U.S. auto makers Ford Motor Co. (F) and General Motors Co. (GM) hit new lows on Tuesday amid growing concern the economic chaos in Europe will further erode their financial footing and begin undermining U.S. consumer confidence.
Ford shares closed at a two-year low of $9.05, a day before it is slated to release it second-quarter earnings while GM dropped to $19.03 making it the lowest level the auto maker's shares have hit since the company's initial public offering in November 2010 when the stock was priced at $33.
Investors are worried both auto makers will take bigger financial hits as European countries such as Greece, Italy and Spain work to restructure their debt. U.S. economic reports, such as an index from the Richmond Federal Reserve showing a contraction in manufacturing activity worsened in July, have also raised speculation of a slowdown that could cause shoppers to stop or delay their buying.
Wall Street analysts expect Ford to report a decline in second-quarter earnings as losses in Europe and other overseas markets undercut strong North American profits. Analysts forecast earnings of 28 cents, compared with 59 cents a year earlier, according to Thomson Financial.
Ford, in late June, warned investors that its second-quarter losses outside North America could be as much as three times as high as the first-quarter losses of $190 million. Ford's deliveries in Europe in June plunged 16%, worse than the overall market, as Ford refused to match rising incentives from Volkswagen AG (VOW.XE, VLKAY) and other companies in the region.
The last time Ford closed at $9.05 was in December 2009. GM's previous lowest closing price was $19.05 in December 2011. The stock has steadily fallen since closing at $38.98 in January 2011. GM will release earning on Aug. 2.
Write to Jeff Bennett at Jeff.Bennett@wsj.com
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