Thursday morning headlines

New worries for GM: Auditors are raising doubts in the company’s new annual report about GM’s viability, though such warnings are often pro-forma boilerplate that can be used as bargaining chips with creditors. From the NYT:

Auditors for Delta Air Lines issued a going concern letter in 2004, when the airline’s cash was shrinking, and its debt was growing. In the wake of the letter, Delta arranged for financing and reached an agreement on concessions with its pilots union. But the airline ultimately filed for bankruptcy in 2005, when oil prices spiked in the wake of Hurricane Katrina. Despite the notice, G.M., which lost $30.9 billion last year, said that it still believed it could be viable and that it did not intend to file for bankruptcy protection.

GE worries overdone?: That's what CFO Keith Sherin tells CNBC this morning. Shares have been falling on concerns about GE Capital, the company's lending arm (the fear is that it will become a drag on its credit rating and balance sheet). GE cut its dividend for the first time since the Depression.

Stocks back down: The Dow is down around 100 points in early trading, perhaps the result of new worries about GM or GE or just a chance for some quick profit-taking after yesterday's modest run-up.

Wal-Mart hangs tough: The chain's February sales number exceeded analysts’ estimates, though most of the other big retailers continued to slump along. Target same-store sales fell 4.1 percent, Gap was down 12 percent, Macy's 8.5 percent, Sakes 26 percent. From the WSJ:

The troubles in the sector reflect the continuing slide in consumer confidence, which has set a new record low each of the past three months. Even deep discounts that had attracted shoppers earlier this year seem to have lost their effectiveness as Americans cut back on spending. Retailers have been saying recently that they are making headway in reducing their inventories. But concerns over profit margins will likely persist because indications are that in many cases deep discounting continued in February.

Dearden's is a survivor: The L.A. retailer of furniture, electronics and appliances has managed to stay in business for 100 years. That would be impressive enough, but what really stands out is that its downtown flagship store at 7th and Main is still operating. Even so, Dearden's is struggling, just like most merchants. From the LAT:

Dearden's isn't planning a blowout party to commemorate the occasion. Except for a few mentions of the big birthday in upcoming circulars, the company is holding off as it struggles with many of the same financial problems that retailers decades younger are facing. "It's awful, we've never seen anything that's as bad as this, and we've seen a lot," said Ronny Bensimon, president and chief operating officer. "Rather than thinking about celebrating, we're thinking -- just like everybody -- about surviving."

THQ cutting costs: The Calabasas videogame publisher is in retreat as it loses ground to Nintendo and cross-town rival Activision. The company, best known for its World Wrestling Entertainment and SpongeBob SquarePants titles, is laying off 600 workers and closing studios. From the LAT:

Analysts say THQ faces formidable headwinds. Though sales of game software grew 25% in 2008, the recession has led consumers to buy fewer titles. In response, retailers are reluctant to stock games that don't immediately sell well or have solid track records. Companies with top-10 titles did well; those that didn't suffered. Adding to the difficulty is the higher cost of making a video game. Development budgets, which ranged between $5 million and $10 million per game five years ago, now routinely hit $25 million, said John Taylor, a managing director with Arcadia Investment Corp.

Kerkorian's woes in Vegas: The Bev Hills billionaire has a majority stake in MGM Mirage - and MGM has been in talks with its bank lenders for a waiver on its loans. The company failed to reach a deal with Deutsche Bank over the final $1.2 billion in financing for their Las Vegas Strip CityCenter project, Reuters is reporting.