By Anastasija Johnson

NEW YORK (Reuters) - General Motors Corp's GM.N assurance on Thursday that it has sufficient liquidity did not prevent credit investors pricing in a 75 percent chance that the largest U.S. automaker would default on its debt in the next five years.

Costs to insure GM debt against default shot to a record high on Thursday and its bond prices plunged, after investment bank Goldman Sachs urged investors to sell its stock and warned that the car maker would need to raise money.

The stock slumped to a 53-year low and helped bring the Dow Jones industrial average .DJI to within a 100 points of a retracement in prices that usually is seen as a bear market.

Goldman's assertion that GM would need additional capital was particularly jarring because investors see its options for raising more funds as limited and costly in the current tight market for high-yield corporate bonds and loans.

"They need to go to market and it won't be easy," said Gimme Credit analyst Shelly Lombard. "The market is back to pricing in some bankruptcy risk."

The cost to insure GM's debt with credit default swaps rose to 33.5 percent upfront, or $3.35 million per year for five years to insure $10 million in debt, plus annual payments of 500 basis points, according to Markit.

Credit default swaps now trade above the previous highs set in 2005 when the U.S. largest automaker lost its investment grade credit rating and was cut to the junk category.

GM's benchmark 8.375 percent bond due 2033 fell more than 3.0 cents on the dollar to 60 cents, the lowest since it was sold in 2003, according to MarketAxess.