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Auto sales continued to drop in June, but we are starting to see signs that sales may be beginning to stabilize a bit.

The auto industry is still in deep trouble. It is going to take a while before things get back to normal, but before things can even start to improve, they have to stop worsening, and that's what may be happening.

Ford (NYSE: F) is the last of the "Big" Three standing on its own two feet. Chrysler and General Motors (OTC: GMGMQ) are on crutches supplied by the federal government. While they're both still upright, those crutches are mighty expensive (the government will own 60% of GM when it emerges from bankruptcy).

Speaking of bankruptcy, Chrysler is already on the other side and now a partner with Fiat. That was perhaps the fastest legal action ever seen. Usually bankruptcy takes between 18 months to two years before a new company emerges.

I recently attended a Lakers' basketball playoff game and took notice of the fact that Toyota Motor Corp. (NYSE: TM) was a major sponsor advertising at Staples Staples Inc (NASDAQ: SPLS) Center. This, while our home grown car companies are all on the verge of collapse.

As we write stories on the depressed economy readers frequently comment about "buying American" as a theme that will help the greater good by keeping jobs and money in the United States.

This patriotic notion got me thinking about what would happen if we carried it further? Would we stop advertising and promotion of foreign products? Would we restrict discussion of foreign products in the media all together? Would we limit the production of foreign products here, even if they are providing jobs for Americans?

At the end of last month, American auto maker Chrysler announced that it was entering into Chapter 11 bankruptcy, and now we are starting to hear reports of plans to close a large amount of dealerships next month.

In all, Chrysler has decided to eliminate 789 out of its 3,200 dealerships that it says are just not pulling their weight in terms of sales. The company stated that its network of dealerships has become antiquated, and there currently exists too much competition between its dealerships.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Activision Blizzard Inc. (NASDAQ: ATVI) Q1 results beat expectations and raised its guidance.
• Alpha Natural Resources Inc. (NYSE: ANR) shares surged after the it reported strong Q1 earnings.
• Archer Daniels Midland Co. (NYSE: ADM) just missed swinging to a loss due to to hefty investment losses.
• CBS Corp. (NYSE: CBS) surprised with a net loss in Q1 as revenue and cash flow declined.
• Chesapeake Energy Corp. (NYSE: CHK) shares fell after it reported disappointing results for the quarter.

Giving a clear indication of just how low demand for new autos has fallen, the world's largest car maker, Toyota (NYSE: TM) posted its first annual loss in 59 years this morning.

We all know that the auto industry is in major trouble. We have America's big three all fighting for their lives, and Chrysler has already been forced to file Chapter 11 bankruptcy.

VW may have passed Toyota (NYSE: TM) as the world's No.1 car company just as Toyota passed GM (NYSE: GM) a year ago. Unfortunately, the companies all operate in an industry where being on the top of the pile does not matter much these days. It is probable that each of these firms loses money on the great majority of the cars they sell. To make matter worse, market share may be a weakness as the auto industry moves out of the recession.

It seems more and more likely that modest sized and nimble auto makers like BMW and Hyundai, who do not have to maintain factories in distant corners of the world and do not have to develop and market dozens of individual products, may hold an advantage in a fragmented car industry. The behemoths rely on their ability to maintain massive capital spending and their cost structures can do them nearly irreparable harm in a weak economy.

Honda (NYSE: HMC) closed at $25.90. HMC March 2009 U.S. sales decreased 36% compared to March 2008. HMC April option implied volatility of 51 is below its 26-week average of 62, according to Track Data, suggesting decreasing price movement.

Toyota Motor (NYSE: TM) closed at $67.90.TM March 2009 U.S. sales decreased 39% compared to March 2008. TM April option implied volatility is at 44, May is at 46; below its 26-week average of 57, according to Track Data, suggesting decreasing price movement.

Nissan (NASDAQ: NSANY) closed at $8. NSANY March 2009 U.S. sales decreased 37% compared to March 2008. May option implied volatility of 60 is below its 26-week average of 65, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Toyota Motor Company (NYSE: TM) is not only worried about its short-term future, but the futures of about 100 of its U.S. suppliers as well. The automaker offered this tidbit to the automobile task force under President Obama that's currently sizing up whether or not to again help General Motors Corporation (NYSE: GM) and Chysler from dire straights.

We all know that the auto industry has been in crisis over the past year, and February was yet another tough month for auto sales, with hefty declines in sales for the major companies.

Analysts have been hoping that the auto industry is going to turn the corner during the second half of this year, but we are still waiting for any sign that things are getting back to normal as General Motors Corporation (NYSE: GM), Ford Motor Company (NYSE: F) and Toyota Motor company (NYSE: TM) all reported major drops in sales last month.

Day 497: The seige continues and we have been out of supplies for weeks. That is how today felt. The morning strength was deemed as a mere opportunity to sell as traders just do not trust gap-ups any more. Ben Bernanke tried to calm the markets, but his comments only helped to add salt to the wounds. This was one of the few days where we actually had some 52-week highs . Here are today's unofficial closing bell levels:

Dow 6,726.02 -37.27 (-0.55%)
S&P 500 696.33 -4.49 (-0.64%)
Nasdaq 1,321.01 -1.84 (-0.14%)

Top Analyst Upgrades and Downgrades

TheStreet.com's Jim Cramer says if you need money for anything important in the near future, get it out of the stock market.

Fall back. Fall back to basic principles. What do people have to do whether they want to do it or not? What do governments have to pay for whether they want something or not? What must be used whether you like it or not?

That's where we are right now in the helter-skelter pell-mell race to take all stocks to single digits as the notion of a worldwide global depression sinks in.

In yet another bit of news from the automotive industry, Honda Motor Company (NYSE: HMC) president Takeo Fukui announced today that he will be stepping down from his post in June after six years with the second-largest Japanese automaker.

Fukui is passing the torch to Takanobu Ito, who currently serves as chief of automobile operations. The 64-year-old Fukui said, about passing the job to his 55-year-old successor, "It is very important to have a generational change in management every few years." It will be a challenging post for Ito, who assumes the reins as Honda and the overall auto industry face falling sales. The company is expecting an earnings loss of nearly 90% this year to $860 million (but at least they are still hoping to turn a profit).

Putting it mildly, it has been a turbulent time in the auto industry. Toyota Motor Corp. (NYSE: TM) replaced its president in January. Mazda announced changes in management in November. And Nissan president has delegated some of his responsibilities of late. Meanwhile, on American soil ... well, we all know the saga the Big-Three is facing.

Beth Gaston Moon works for WeSeed.com, "The stock market for the rest of us." The above comments are not intended as trading or investment advice.

The Japanese appear more willing to replace car companies CEOs as profits fall due to the troubled auto market. In the U.S., none of The Big Three has replaced its chief executive since the industry crisis began.

According to The Wall Street Journal, "Honda Motor Co (NYSE: HMC) said Monday that it appointed Takanobu Ito, a senior managing director, as new president and chief executive to replace Takeo Fukui." The departing CEO will get to stay on the board of directors. Just three weeks ago, Toyota (NYSE: TM) replaced its chief executive.