Ford and GM rallied Wednesday after both automakers topped third-quarter earnings forecasts, despite soaring losses in Europe.
Shares of Ford (F) climbed more than 5%, as the company's record profit of $2.3 billion in North America helped offset its $468 million loss in Europe, bringing losses in Europe so far this year to just over $1 billion.
Meanwhile, General Motors (GM), the largest U.S. automaker, reported a third-quarter profit that trounced analysts' estimates. Though profits fell sharply in Europe and North America for GM, its international unit, which includes operations in China, improved. In fact, GM once again sold more cars and trucks in China than in the United States in the period.
StockTwits traders remain fairly bullish on the Detroit automakers even though Europe remains a mess.
In an effort to stem the losses in Europe, Ford said it would close three plants and cut 6,200 jobs Europe by 2014. But it also warned it would not be profitable there until the middle of the decade.
Even hedge fund manager Doug Kass, known for successful short selling ideas, is bullish on Ford and GM.
Stocks were flat Wednesday morning and one reason was the disappointing retail sales report for May. (Traders may have also been transfixed by JPMorgan Chase (JPM) CEO Jamie Dimon on Capitol Hill.) But if you dig behind the scary headline numbers, i.e. that sales were down for a second-straight month, you'd notice two key (and related) things. Gas prices are lower and auto sales are up.
The sharp decline in gas MOREPaul R. La Monica - Jun 13, 2012 1:15 PM ET
#StupidStock move of the day! $F deserves to be up because of Moody's upgrade. But $GM riding coattails on day like today? Seems odd to me.— Paul R. La Monica (@LaMonicaBuzz) May 23, 2012
Stocks are plunging today because of worries about Europe and the global economy. You wouldn't think that would be great news for car companies, arguably one of the most economically sensitive businesses out there. Yet, shares of MOREPaul R. La Monica - May 23, 2012 2:09 PM ET
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