GM And Ford Cut To Junk! Here’s How It Will Affect You

Stocks were lower Thursday ahead of Friday’s jobs
number. Mid-day the market hit a downdraft after Standard & Poor’s
cut two automaker’s debt ratings.

S&P cut GM’s debt rating to junk (BB) and put the bonds on negative
watch, citing concern with declining SUV sales, in part due to higher gasoline
as well as aging models. The move was not unexpected. Trader talk: when are the
other ratings agencies going to also downgrade? And, will the ratings changes
slow growth overall and will it hurt corporate borrowing and investment? Some
speculate that the move strengthens Kirkorian’s hand.

Ford was also cut by S&P, to BB+. This makes the two main US automakers at
junk credit status.

Jobless claims for the week of 4/30 rose 11K to 333K. The 4-week
moving average is now 321,500.

Greenspan said that oil prices at current levels may spur conservation
much like was seen in the 1970s.

IBM is reducing
its workforce by 10,000 to 13,000. Job cuts will be mostly in Europe. The
company will take a $1.3 to $1.7 billion restructuring charge.

Lazard began trading today on the NYSE–symbol LAZ.. The company
priced its IPO at $25; the stock closed at $24.00.

Tomorrow morning, look for the jobs number–175K expected.

Strong sectors were:  Oil
(
$XOI.X |
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Natural Gas
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$XNG.X |
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+0.68%

Weak sectors were:  Disk Drives
(
$DDX.X |
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Computer Hardware
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$HWI.X |
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$IUX.X |
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-0.75%

Stocks in the News

Wal-Mart’s
(
WMT |
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and also forecast a 2 percent to 4 percent increase in May
same-store sales. Sales at Sam’s Club  rose 4.9%.

Merck
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MRK |
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Ann Taylor
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ANN |
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Abercrombie & Fitch’s
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ANF |
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expected.

Wet Seal’s
(
WTSLA |
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expected.

JC Penney’s  
(
JCP |
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and FY.

Cost Plus
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CPWM |
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weaker-than-expected traffic.

Blockbuster
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Starbucks’
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