Toyota shares drop as recall investigation widens

Shares of Toyota dropped Wednesday after the U.S. Transportation Secretary advised owners of the company's recalled cars to stop driving them.

Ray LaHood's spoke before a House subcommittee one day after the automaker reported disappointing January sales and an investigation widened into sticky gas pedals that prompted a massive recall.

LaHood said later that he only meant that Toyota owners should take the cars back to the dealer to have problems fixed.

Toyota said Tuesday its sales slipped 16 percent last month, and they could fall further. Meanwhile, Toyota rivals General Motors, Ford, Nissan and Hyundai all posted double-digit sales increases.

In an note to clients Wednesday, Goldman Sachs analyst Kota Yuzawa cut Toyota shares to "Neutral" from "Buy," suggesting that the stock price could remain low for three to six months.

"We foresee further harsh news flow surrounding Toyota until recall problems are resolved," he wrote.

Toyota's most recent recall affects 2.3 million vehicles in the United States.

The automaker's woes helped knock the Camry out of the spot of top-selling car in the U.S. last month - a position it has held for the past eight years. Camry ranked fifth in car sales last month.

Toyota announced a recall of eight models on Jan. 21 and halted sales of those models five days later because the accelerator pedals could stick and cause a crash.

Shares of Toyota Motor Corp. fell $4.14, or 5.3 percent, to $74.04. The stock has traded between $56.79 and $91.97 in the past year.