US STOCKS-GM warning, GE worry send market lower at open

NEW YORK, March 5 - U.S. stocks dropped sharply at Thursday's open, weighed down by General Motors' warning about its viability and caution about the outlook for major conglomerate General Electric.

* General Electric shares fell 1.2 percent to $6.61 as investors fretted about fallout from its embattled finance arm and worried about a possible downgrade of GE's credit rating. On Wednesday, GE hit lows not seen since 1991.

* Shares of embattled automaker GM dropped more than 14 percent to $1.89 after it said there were substantial doubts about its ability to continue as a going concern, offsetting optimism spurred by a solid sales report from Wal-Mart, the world's biggest retailer.

* The Dow Jones industrial average dropped 124.57 points, or 1.81 percent, to 6,751.27. The Standard & Poor's 500 Index fell 14.46 points, or 2.03 percent, to 698.41. The Nasdaq Composite Index shed 21.65 points, or 1.60 percent, to 1,332.09.