The dollar continued its slide against the euro, pound and yen today as investors weighed whether the United States might be the next country to be put on a negative credit watch by ratings agencies.

 

Standard & Poor's on Thursday lowered the United Kingdom's credit outlook to "negative" from "stable" because of the country's growing debt burden. For now, S&P maintained the nation's credit rating at AAA. But S&P said its warning was based on a projection that net U.K. government debt could approach 100% of national income.

 

The Obama administration is preparing to send GM into bankruptcy protection, according to published reports. The government would give the troubled automaker an additional $30 billion or so in federal loans, bringing the U.S. investment to $45 billion. General Motors hopes by July 1 to get bankruptcy court approval of a plan to peel off its good brands and assets into a viable company.

 

Mounting speculation that General Motors (GM, news, msgs) will file for bankruptcy protection as early as May 31 sent the automaker's shares tumbling 25% today and helped prevent the Dow Jones Industrial Average ($INDU) from notching a modest gain ahead of the Memorial Day weekend.

 

The automaker won more cost-cutting concessions today, from its Canadian labor union, as it prepares to enter federal bankruptcy court in a showdown with its bondholders, Reuters reported.

 

The government is prepared to cancel most or all of its existing debt in the automaker and invest in a "new" GM that could emerge from bankruptcy later this year.

 

The Dow shed 15 points to close at 8,277. The Nasdaq Composite Index ($COMPX) lost 3 points to 1,692, and the Standard & Poor's 500 Index ($INX) closed down 1 point to 887.