General Electric Co's shares fell as much as 15 percent on Wednesday, touching their lowest point since 1991, and the cost of insuring GE Capital's debt hit a record high on anxiety about that unit.

The shares climbed back from their lows after the U.S. conglomerate spoke out to investors, saying that it had acted aggressively to adapt to the current severe recession and that it had no plans to raise additional equity.

GE shares were down about 65 cents, or 9 percent, at $6.36 on the New York Stock Exchange in morning trading, after touching a low of $5.87 early in the session.

People are playing the $2.50 options on this thing pretty heavily, said Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisors in Cincinnati, which holds GE shares, referring to bets that the U.S. conglomerate's stock could fall to that level.

This looks like the same kind of bear rush that the financials got last summer. There's blood in the water and they're going to keep pounding away on this name.

Given GE's large retail shareholder base, some people who held the stock for its yield may now be selling, said Wayne Titche, co-manager of AHA diversified equity fund and chief investment officer of AMBS Investment, whose GE holdings total 380,000 shares.

Meanwhile, foreign investors appear to be selling GE's debt in anticipation of the company losing its AAA-rating.

People are panicking because of the credit default swap spreads and because the yields are going up, and you have this perfect storm, Titche said.

In an e-mail sent to its investors, GE said: In the unexpected event that GE Capital requires additional equity, we have a number of options to satisfy that need without seeking external capital.

The cost of insuring GE Capital's debt against default with credit-default swaps earlier spiked to 20 percent upfront -- meaning that an investor had to pay $2 million immediately plus $500,000 a year to insure $10 million of debt, according to data from Phoenix Partners Group. Later in the morning the amount of the upfront payment eased to $1.5 million.

The percentage of GE shares held short hit an all-time high late last month, but short-sellers have been covering their positions since then, according to short-selling data research firm, DataExplorers.

DataExplorers, which tracks the number of shares out on loan to short-sellers and other investors, said that as of February 20, 1.75 percent of General Electric shares were out on loan -- an all-time high. Its most recent data showed that short-sellers -- who profit when share prices go down -- had been covering some of their positions. As of Wednesday, the company said its data showed only 1.33 percent of GE shares were out on loan.

That figure is still nearly double the 0.7 percent on January 1, Data Explorers said.

The Fairfield, Connecticut-based GE on Friday cut the amount of its quarterly dividend by 68 percent. Investors are now focused on a possible downgrade to its triple-A credit rating from Moody's Investors Service or Standard & Poor's.

GE shares have lost roughly 79 percent of their value over the past year, a steeper drop than the 45 percent slide of the Dow Jones industrial average <.DJI>, or the 47 percent tumble of the Standard & Poor's 500 index <.SPX>.

(Additional reporting by Dena Aubin, Emily Chasan and Deepa Seetharaman in New York; Editing by Maureen Bavdek and Gerald E. McCormick)