General Motors shares lost nearly one-third of their value to close at $4.76, their lowest level in more than 58 years. Ford Motor shares fell 21.8 percent to $2.08 as a leading industry analyst warned that the auto market could "collapse" next year.

GM's sharp fall helped drive down the Dow Jones industrial average 679 points to 8,579, a loss of more than 7 percent. When the average crashed through the 9,000 level for the first time in five years in the final hour of trading, selling was still accelerating.

As bad as the day was, even worse was the cumulative effect of a historic run of declines: The Dow suffered a triple-digit loss for the sixth day in a row, a first, and the average dropped for the seventh day in a row, a losing streak not seen since 2002.

"Right now the market is just panicked," said David Wyss, chief economist at Standard & Poor's in New York. "Nobody wants to take on any risk. Everybody just wants to get their money and put it under the mattress."

The declines came on the one-year anniversary of the closing highs of the Dow and the S&P. The Dow has lost 5,585 points, or 39.4 percent, since closing at 14,164.53 on Oct. 9, 2007. It's the worst run for the Dow since the nearly two-year bear market that ended in December 1974 when the Dow lost 45 percent.

The S&P 500, meanwhile, is off 655 points, or 41.9 percent, since recording its high of 1,565.15.

Financial and technology stocks were also down Thursday, reflecting the current turmoil in the world's financial markets and resulting slowdown in business spending.

But Thursday's selloff of auto stocks, which struck the Japanese automakers as well, showed that investors fear the industry may run out of gas before financial conditions improve.

Several factors were at work:

Standard & Poor's said the credit rating of GM and Ford could fall further into junk status due to the "rapidly weakening state" of the global automotive market.

Influential industry forecasters J.D. Power and Associates and Global Insight lowered their auto sector expectations for 2008 and predicted a slow recovery.

"While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse," said Jeff Schuster, J.D. Power's executive director of automotive forecasting, in a statement.

Financial stocks are falling, and that hurts auto stocks, said Brett Hoselton, an analyst who follows GM stock for KeyBanc Capital Markets.

"Obviously, GM and Ford, they're closely tied to automotive financing," Hoselton said.