In another rollercoaster trading day, shares in Morgan Stanley were 16 per cent lower at $14.09 at midday in New York, while GM shares had lost 15 per cent of their value shortly before noon, falling to $5.87, their lowest level since the early 1950s.
The share price declines coincided with the lifting of a ban on traders who aim to profit from share price declines. The ban had prevented short selling on nearly 1,000 companies, including financial firms and industrial groups such as GM. The ban was lifted by the US Securities and Exchange Commission late on Wednesday night.
Morgan Stanley insiders said they expected short-sellers to target its shares yesterday but added that the sharp fall would not affect the bank's deal to sell a 21 per cent stake to Japan's Mitsubishi UFJ Financial Group for $9bn.