Auditors: GM Bankruptcy Necessary; Ford Plans to Reduce Debt by 40%; Wal-Mart Feb. Numbers Strong; Google Sitting on $8.6 Billion in Cash; Mortgage Delinquencies Hit Record High; Blockbuster Won’t File for Bankruptcy; Citigroup Shares Break the Buck; Oil Falls Below $44

• The auditors at General Motors Corp. (GM) have raised “substantial doubt” about the carmaker’s odds of surviving without filing for bankruptcy protection. “Amid the automotive depression, GM is dependent upon the largesse and forbearance of the U.S. and foreign governments to sustain its various entities,” Standard & Poor’s equity analyst Efraim Levy said in a note for clients, Reuters reported.

• Ford Motor Co. (F) said it plans to cut about 40% of its $25.8 billion automotive debt by offering creditors cash and new shares. Despite the plan, Standard & Poor’s cut its corporate credit rating on Ford to “CC” from “CCC+” while Fitch said it will not affect the current rating of “CCC,” Reuters reported.

• Despite overall retail numbers falling in February, Wal-Mart Stores, Inc. (WMT) reported sales growth for the month that outpaced its quarterly forecast. Revenue increased 5.1% at U.S. stores open at least one year, as more customers came to the world’s largest retailer for groceries.

• Google Inc. (GOOG) has an $8.6 billion pile of cash that will only be used for “very very conservative investments,” Chief Executive Eric Schmidt said in an interview with The Wall Street Journal. The primary plan is to let the cash “pile up” as the company tries to retain its footing during the global financial crisis.

• Mortgage delinquencies rose to the highest level on records that date back to 1972, as unemployment rose to a 15-year high and real estate values tumbled, Bloomberg reported. The U.S. real estate market lost $2.4 trillion in value last year, and the percentage of loans at least a month overdue or in foreclosure increased to a seasonally adjusted 7.88%, the Mortgage Bankers Association reported yesterday (Thursday).

• Blockbuster Inc. (BBI), the top U.S. movie rental chain, said sales at stores open at least a year rose 4.4% in the fourth quarter as strong demand for electronics and video games overshadowed a slump in rentals.  Blockbuster shares jumped 23% following the news and the company said it has no plans to file for bankruptcy, as was rumored earlier this week, Reuters reported.

• Shares of Citigroup Inc. (C), once the world’s biggest bank by market value, dropped below $1 in New York trading for the first time as investors lost confidence the shares could recover after more than $37.5 billion in losses and a government rescue. Citigroup is now the 184th biggest bank by market value, behind Malaysia’s Bumiputra-Commerce Holdings Bhd, according to data compiled by Bloomberg.

• Oil fell nearly 4% yesterday (Thursday) as the deteriorating economic outlook heightened expectations that consumption would shrink further, Reuters reported. U.S. crude slipped $1.77 to settle at $43.61 a barrel, while London Brent crude fell $2.48 to $43.64. Oil prices have dropped more than $100 a barrel since last July as the economic crisis triggers the first decline in global energy use in a quarter century.

Source: Global Investment News Briefs Friday, March 6, 2009