Russia's woes drag market down
Showbiz stocks plummeted along with the rest of Wall Street Thursday, pulled by investors’ fears of global economic instability from a collapsing Russian banking system, with the Dow Jones Industrial average dropping 357.36 points, or 4.2% to 8,165.99, its third-biggest point loss in history.
While entertainment stocks were battered across the board, CBS Corp. recorded one of the few gains of the day, jumping nearly 8% or $2.06 to $29.25, in response to its announcement that it was selling a minority stake in its radio business to the public in an attempt to boost its sagging stock price.
The Dow has now declined 1,150 points, or more than 10%, from its July 17 high of 9,337.97, enough to be considered a fully fledged correction.
Michael Metz, managing director at CIBC Oppenheimer said he detected a bit of a panic in the sell-off as investors worry that U.S. exposure to falling Latin American markets would mean slower growth and lower corporate profits.
Wall Street took its direction from overseas stocks, which woke up to find that Russia’s financial crisis took on a more political bent as pressure mounted for President Boris Yeltsin to quit. Ruble trading was also suspended for the second successive day.
The Russian market plunged 20%, and the selling spilled over to other markets.
“I think we are having a frantic exit from equity markets across the world,” Metz said. “People are concerned and they are raising cash.”
Amid Thursday’s market rout, Pixar, General Electric and cablers were hit the hardest, while exhibition was the showbiz sector least effected by the Dow’s downward spiral.
Computer animator Pixar felt the day’s biggest loss, dropping a hefty 12% to end at $33.50, a loss of $4.75 a share.
NBC parent General Electric fell $3.87, over 4% to $86.56, down from a record high of $96 a few weeks ago.
Time Warner, which a few weeks ago hit a high of $100, dropped $3.87 to $86.63, while Walt Disney fell $1.75 to $31.75.
Viacom fell $1.69 to $54.31 and Seagram dropped $1.25 to $32.75. MGM, which has been rallying in recent days, dropped $1 to close at $18.25 and News Corp. dipped 69¢ to $26.13.
Among cablers, Cablevision Systems fell $2.75 to $38.13, down nearly 7% while Cox Communications dropped $2.31 to $46.56. MediaOne Group also dropped $2.31 to $45 and TCI fell $2.68 to $34.50.
Exhibitors were also hit, with AMC Entertainment continuing its downward slide, dipping $0.38 to $14 while Loews Cineplex Entertainment dropped 36¢ to $8.94.
(Reuters contributed to this report)