If Stocks Slid Because of Weak Auto Sales Then the Market Got It Wrong (Update 1)

Updated to include Ford and GM stock performance on Tuesday.

DETROIT (TheStreet) -- Ford  (F) and GM (GM) shares were rising Tuesday, as investors perhaps took note that the automakers' January sales declines, which contributed to the market's slide on Monday, were primarily attributable to harsh winter weather.

Shortly before noon, Ford shares were up 28 cents to $14.82 and GM shares were up 52 cents to $35.77. 

"Cold weather in the Midwest and Northeast resulted in double-digit regional declines," wrote UBS analyst Colin Langan, in a note issued following the automakers' sales reports on Monday. "We see the January weakness as temporary."

Additionally, Deutsche Bank analyst Rod Lache wrote: "Sales were up double-digits in the Western region (which had no weather affect), but down double digits in the Midwest and Northeast and down mid-single digits in the remainder of the country."

Auto sales are a key economic indicator. Not only do they reflect major purchasing decisions by consumers, but also they are reported the day after the selling period ends and auto manufacturing is an important contributor to the economy.

It's "not as bad as it looks," wrote Goldman Sachs analyst Patrick Archambault in his report. He said the January seasonally adjusted annual sales rate was 15.2 million, below the consensus estimate of 15.7 million, but that weather and reduced fleet sales were the causes. Fleet sales fell by 200,000 vehicles or 27% "due to order timing and the disruption of some deliveries which we should also get back in subsequent months," he wrote.

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