Auto stocks rise and oil prices fall

Share prices for automakers climbed by their largest margins in recent months today, while oil prices have dropped by $10 a barrel in two days.

Shares of General Motors and Ford Motor Co. each gained more than 15 percent after taking almost daily beatings in the stock market in recent weeks.

At close, GM shares finished up $1.64 or 16.6 percent to $11.48 a share. Ford shares closed at $5.49, up 84 cents or 18.0 percent.

The stock market drew support from oil prices, which pulled back by a combined $10.58 a barrel in two days. Light, sweet crude fell $4.14 a barrel, to $134.60, today after a drop of $6.44 on Tuesday, July 15.

Oil prices declined after Energy Department figures showed that domestic inventories of crude oil and gasoline rose last week rather than dropping, as analysts had expected, The Associated Press reported.

The recoveries of GM and Ford stock prices came despite credit rating agencies downgrading or threatening to lower their ratings for each automaker.

Moody's Investors Service said it would review its ratings on Ford, while Fitch Ratings on Tuesday downgraded GM to B-minus from B.

The agencies cited a dire outlook for automakers trying to ride out a worse-than-expected U.S. sales year. While making $15 billion in cuts and other changes to its spending Tuesday, GM said 2008 will be the worst sales year in a decade.

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