NEW YORK — The stock market took investors on a sickening ride Thursday as the rocky Dow plunged as much as 383 points during the afternoon. But the Dow Jones Industrial Average closed off its lows, giving some on Wall Street hope.
Dow ended the day down 97 points, or 1%, while the Nasdaq managed to eke out a 67-point gain, another ray of hope for battered Wall Streeters.
Media stocks, until recently famed for marching to their own beat and rarely trading either up or down as a group, were uniformly thrashed, with Viacom hit particularly hard as investors doubt the company will achieve its first-quarter numbers.
“People thought Infinity would do better than the (overall) industry,” but not anymore, said AG Edwards’ entertainment analyst Mike Kupinski, referring to Viacom’s giant radio and outdoor advertising division.
Shares of Viacom, which is considered the media conglom most exposed to advertising, dropped 5.5% to $39.79 — a new 52-week low.
“I think the advertising environment is even worse than what many expected and that numbers will come down even further than expected, which may create a near-term pall over the industry,” Kupinski added.
Vivendi Universal also hit a new year low, dipping 3.5% to $56.
Walt Disney eased 1.5% to $26.97, News Corp. closed down 2.5% to $30.77 and AOL Time Warner fell 2.8% to $36.77.
Many of these stocks, which have been beaten up for weeks, are starting to looking darn attractive. “I’m not saying it’s over, but at some point the market already discounts disappointing news,” said one investor. For media stocks, that means all the bad ad news possible could already be reflected in stock prices.
Newspaper companies have also been adding their voices to the chorus of doom, with Gannet, Tribune, Dow Jones, Knight-Ridder, EW Scripps and McClatchy all succumbing to the weak ad market with most saying they won’t meet their earnings targets for the first quarter. They still expect the ad market to pick up later this year.
Tribune, however, was one of the rare winners Thursday, shrugging off a dismal Dow to close up 5.4% at $38.16.
A whole host of ills are plaguing the marketing just now. Non-tech, blue-chip stocks like Procter & Gamble and Deere joined big tech companies in issuing profit warnings and layoffs this week. The Japanese economy is on the brink of disaster and many think the U.S. Federal Reserve Bank appears to be behind the curve on interest rates with a meager half-point rate cut earlier this week.