This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

6 U.S. Default Winners & Losers

6. Ford

For the automotive sector, a rise in interest rates is a double-whammy. As a capital-intensive industry, it is hugely dependent on debt. An increase in interest rates will weigh heavily across the supply chain. On the demand side, higher interest rates on car loans will hurt spending.

General Motors (GM - Get Report), Ford (F - Get Report) and Toyota (TM - Get Report) will be among the worst affected, according to IBIS.

For Ford, the hike in interest rates would come at a time when is trying to pay down its massive debt, which totaled over $100 billion in 2010.

The company cut debt by $2.6 billion in the second quarter. Reducing its leverage is crucial in order for the company to win an investment grade rating. But that goal might be farther from its reach in the event of a sovereign debt downgrade.

Ford is already coping with a difficult operating environment as commodity costs have increased and the economic outlook appears weak.

Ford reported revenue growth of 13% in the second quarter to $35.5 billion. Net income fell to $2.4 billion or 59 cents per share, lower than the year-ago quarter profit of $2.5 billion or 61 cents per share.

The automaker said sales of light vehicles will likely come in the lower end of its 13 million to 13.5 million forecast.

2 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AGCO $47.44 -0.43%
BLK $362.44 -0.93%
DE $87.61 -0.09%
EFX $93.00 -0.01%
F $15.92 -1.40%


DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs