S&P Junks GM, Ford

Updated from 2:41 p.m. EST

In moves that were seen by many as inevitable, Standard & Poor's on Thursday lowered its ratings on the debt of General Motors(GM Quote) and Ford (F Quote) to speculative grade, or junk, status.

Shares of both companies slid more than 5% in the wake of the cuts, one day after rallying when a private investor offered a rich price for a big slug of GM stock. The S&P downgrades also sent broader stock averages down as much as 1% and roiled corporate bond markets, where many fund managers will now be prohibited from owning GM and Ford. ...