Don't let the stock market fool you. The June sales reports by automakers showed what damage high gasoline prices are doing to the auto business.
Only one of six big automakers -- Honda Motor (HMC, news, msgs) -- could say it sold more vehicles than a year ago. The situation is so dire that investors rejoiced when General Motors (GM, news, msgs) said it sold 8% fewer cars than a year ago -- better than the 15.9% decline analysts had expected.
GM's sales of 265,937 vehicles ensured that it will remain the top automaker in the United States at least for another month. Toyota's (TM, news, msgs) sales fell 11.5% to 193,234 units.
But, as investors dug into the numbers, the stark reality was this: GM's big incentive promotion of a week ago helped enormously but the bill will have to be paid. That's why GM shares, which had been up as much as 15%, ended the day up 2.2% to $11.75.
GM's was the third-best performance among the 30 stocks in the Dow Jones Industrial Average, which closed up 32 points to 11,382 -- after falling as many as 166 points earlier in the session. The Standard & Poor's 500 Index was up 5 points to 1,285, and the Nasdaq Composite Index was up 12 points to 2,305.
It wasn't clear if the rebound can be sustained. For one thing, crude oil moved higher, closing at $140.97 a barrel, up 97 cents from Monday.
The whole auto industry is now reeling. Autodata, which tracks motor vehicle sales, says June sales ran at annualized rate of 13.6 million units, down 13.4% from a year ago. Ford (F, news, msgs) and Chrysler Group weren't so lucky. Ford sales fell 19%. Sales of its F- series pickups -- the company's biggest money maker for years -- fell 40%.
Chrysler's sales fell 28%, a day after the company said it was mothballing a minivan assembly plant in St. Louis trimming pickup production at another plant. Chrysler is now the fifth-largest automaker, based on sales, behind GM, Toyota, Ford and Honda.