Moody's says may cut GM to junk status

NEW YORK, July 7 (Reuters) - Moody's Investors Service on Thursday said it may cut the debt ratings of General Motors Corp. to junk status, citing escalating sales incentives and consumer preferences shifting to more fuel-efficient vehicles.

Downgrades usually raise a company's borrowing costs.

Moody's also said it may cut the debt ratings of GM's finance arm,