Stocks dropped sharply at Thursday's open, weighed down by General Motors' warning about its viability and caution about the outlook for major conglomerate General Electric .

Shares of embattled automaker GM dropped more than 14 percent to $1.89 after it said there were substantial doubts about its ability to continue as a going concern, offsetting optimism spurred by a solid sales report from Wal-Mart , the world's biggest retailer.

The Dow Jones industrial average <.DJI> dropped 124.57 points, or 1.81 percent, to 6,751.27. The Standard & Poor's 500 Index <.SPX> fell 14.46 points, or 2.03 percent, to 698.41. The Nasdaq Composite Index <.IXIC> shed 21.65 points, or 1.60 percent, to 1,332.09.

(Editing by James Dalgleish)