The Five Dumbest Things on Wall Street This Week

3. Junkyard Dogs

GM (GM Quote) and Ford (F Quote) may be bitter rivals, but they can agree on one thing: They don't like seeing their bonds consigned to the junk heap.

On Thursday, S&P slashed its ratings on Ford and GM debt to noninvestment grade levels. The bond rating agency cited GM's competitive problems and Ford's declining sport utility vehicle business. S&P questioned management's turnaround plans at both companies. Both stocks slid sharply.

The downgrade itself could hardly be described as a shock. Bond buyers have been demanding higher interest rates from the companies because both have slashed earnings guidance and handed out other bad news this spring.

Still, the timing came as a bit of a slap in the face, as Wednesday brought Detroit its first good news in who knows how long. Investor Kirk Kerkorian's announcement that he wanted to buy more GM stock sent GM shares up 18% and Ford up 7%.

"We are disappointed with S&P's decision to lower the credit rating of both GM and GMAC," said GM's Jerry Dubrowski. "Clearly GM has many challenges in North America, but the company is moving aggressively to address these challenges."

"We disagree with S&P's action today," added Ford CFO Don Leclair. "We're disappointed that it discounts our considerable liquidity and our access to diverse funding sources, as well as the recent successes of our new products."

Unfortunately, there's no sign that either of these companies is going to stop disappointing investors anytime soon.