Investors are worried that the ratings downgrade on US sovereign debt and everything directly tied to the former AAA rated bonds will drive up interests rates and make credit more costly to consumers. What could really take a hit are rates on car loans (at a yearly low in June), which could do wonders in stymieing demand for new car sales and leases. As a result, auto stock are tanking across the board today, underperforming the wider market at a significant clip.
Here’s a look at how a panel of automakers are performing:
First Trust NASDAQ Global Auto Index Fund ETF (CARZ) -5.00%, Ford Motor Co. (NYSE:F) -7.18%, General Motors Co. (NYSE:GM) -6.80%, Daimler AG (DDAIF) -7.59%, Nissan Motor Co. (NSANY): -3.85%, Honda Motor Co. (NYSE:HMC) -3.57%, Volkswagen AG (VLKAY) -9.90%, Navistar Intl. (NYSE:NAV) -11.72%, and AB Volvo (VOLVY) -7.745%.