The Dow's overall point drop was the third largest on record (after Sept. 29's 778 point plunge and a 686 point drop when markets reopened following the Sept. 11, 2001, attacks). The Dow has dropped 39.6% from the all-time high hit one year ago this week.
GM and Interpublic
General Motors Corp. stock crashed 31% to $4.76, its lowest closing price since 1950. Interpublic Group of Cos., a diversified agency firm whose top clients include GM, slumped 7.3% to $5.62, its lowest point since 1990.
Remarkably, GM's market cap is only $2.78 billion -- barely above Interpublic's depressed market cap ($2.68 billion). GM's low market cap reflects dim prospects in the global auto market and the weight of its debt load. Standard & Poor's put GM on Creditwatch, signaling it might cut its debt rating -- a move that would increase GM's cost of borrowing at a time when industry sales are sliding.
A cut would sink GM to a "CCC+" rating or worse, deep in junk-bond territory. S&P also put Ford Motor Co. on Creditwatch, signaling a possible downgrade; S&P said both automakers have "adequate liquidity" for this year.
Ten AdMarket stocks had double-digit declines: GM (down 31.1%); Ford (down 21.8%); newspaper publisher McClatchy Co. (down 18%); radio broadcaster Entercom Communications (down 17.8%); Sprint Nextel (down 15.3%); Washington Post Co. (down 12.5%); Sears Holdings (down 11.7%); coupon distributor Valassis Communications (down 11.6%); American Express Co. (down 11.5%); CBS Corp. (down 10.1%). See current prices of AdMarket 50 marketer, media and agency stocks here.
Stock in Time Warner, the nation's largest media company, dipped below $10 for the first time since 2003. Time Warner closed at $10.09, down 6.4%.
Even supposedly golden companies have seen their shares come under intense pressure. Google shares slipped only 2.7% today, but the stock is down 56% from last November's all-time high ($747). Google's intraday low ($321.67) marked its lowest price since late 2005, a year after the company went public (at $85 a share).
Back in 2005, giddy shareholders paid 74 times earnings to get into Google. The company now trades at just 22 times its four-quarter trailing earnings. Frightened investors no longer ogle Google, but the stock could attract interest from long-term investors willing and able to take a plunge.