Wall Street wasn't rocked Thursday by news of another accounting scandal. But rumors of bookkeeping irregularities took a toll on two big-name stocks.
Both General Motors Corp., the world's largest auto maker and a member of the Dow Jones industrial average, and Clear Channel Communications Inc., the nation's biggest radio station owner, denied what the companies said were rumors regarding problems with their books.
In an atmosphere charged by recent revelations of corporate accounting woes--most recently WorldCom Inc.'s bombshell Tuesday that it would have to restate earnings--investors decided to sell first and ask questions later.
Trading of GM shares was briefly halted on the New York Stock Exchange because of an imbalance of buy and sell orders. The stock ended the day down $1.58 at $51.50.
"General Motors is not subject to an accounting investigation and strongly believes that its accounting is appropriate," a GM spokesman said. "GM believes that rumors of irregularities in its accounting are unfounded."
Some market analysts speculated that the GM rumor was floated by short sellers--investors who try to profit from falling stock prices. Short sellers often are accused of spreading false, damaging information about a company in an attempt to drive down its stock.
In Clear Channel's case, the company denied rumors that it is being investigated by the Securities and Exchange Commission. News reports stated that the San Antonio-based company canceled an investor conference call, but a spokeswoman said no such conference had been scheduled.
"There is not an SEC investigation of Clear Channel and there are no accounting issues or irregularities," Clear Channel President Mark Mays said.
The firm said Mays issued his SEC statement after Clear Channel was bombarded with calls from Wall Street analysts about a possible probe and the conference call.
Clear Channel's stock was already under pressure after a bill was introduced in Congress on Thursday that would limit radio station ownership and split radio stations and concert promoters. By day's end, its shares were down $4.55 to $31.20 in NYSE trading. Volume exceeded 30 million shares, far above Clear Channel's daily average.