Standard & Poor's said Thursday that it might drop its ratings on automakers GM ( GM) and Ford ( F) even farther into junk territory, citing the continuing slowdown in vehicle sales.

The ratings agency placed its ratings on GM, including the B- long-term corporate credit rating, on CreditWatch with negative implications. As for Ford, the company and its financing arm Ford Motor Credit also went on CreditWatch negative. Currently, Ford carries the same B- long-term corporate credit rating.

"The CreditWatch placement reflects the rapidly weakening state of most global automotive markets, along with capital market conditions that will remain a serious challenge for the foreseeable future," S&P analyst Robert Schulz wrote in a research report about GM.

S&P's ratings on GM's 49%-owned finance affiliate GMAC also went on CreditWatch negative. For now, the ratings for GMAC unit Residential Capital aren't on CreditWatch.

Despite the move, S&P said it believes GM has enough liquidity for at least the rest of 2008, as measured by its cash balances and available bank facilities, but the "accelerating deterioration in industry fundamentals will be a serious challenge to liquidity during 2009."

Echoing its comments on GM, S&P said Ford had adequate liquidity for the remainder of this year, but that next year could be more difficult for the company.

Shares of GM plunged more than 30% to $4.76, its worst point in almost six decades. Ford was also punished, dropping nearly 20% to $2.14.

This article was written by a staff member of TheStreet.com.

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