Showbiz stox end week on up note

Sony, Viacom, Disney give up some gains at day's end

NEW YORK — Showbiz stocks continued to rebound along with the broader market last week from their post-terrorist attack lows, as the Street cheered the Fed’s latest interest rate cut and media investors took solace in encouraging comments made at a Goldman Sachs confab in Gotham.

But the week’s gains were tempered by a mixed Friday session for media congloms, with such entertainment giants as Sony, Viacom and Disney giving up some of their hard-fought gains.

The Dow Jones Industrial Average added just under 59 points Friday, or 0.65%, to end the day at 9,119.77. This week’s gains mark the first time the blue-chip average has crept above the 9,000-mark since its 14% free fall shortly after the attacks.

Meanwhile, media execs reassured attendees of Goldman’s “Communacopia X” conference that the beleaguered advertising market, while still a long way from recovery, was not likely to get too much worse. Head honchos including AOL Time Warner’s Steve Case and News Corp.’s Peter Chernin argued that the fundamentals of the biz remained sound and the recovery would come eventually.

Better than expected

“The news on the ad side of things was, on the margin, a lot better than people had expected,” said Prudential Securities analyst Katherine Styponias. “That’s a big piece of what’s being reflected in the stocks this week.”

Wall Street also cheered Federal Reserve chairman Alan Greenspan’s decision to cut interest rates by another half-percentage point to 2.5% — their lowest level in decades.

News Corp. shares were among the best performers in the media sector last week, despite warnings that earnings would come in below expectations. The stock jumped $2.25, or 9.3%, since the previous Friday. The week’s other winners included USA Networks and Sony, which gained 9.9% and 6.2%, respectively.

Styponias attributed some of the renewed confidence in USA to comments by topper Barry Diller renewing his commitment to the purchase of a controlling stake in travel services Web site Expedia from tech giant Microsoft.

Far less fortunate was Cablevision: The conglom came out with a slew of bad news at the end of the week, including a profit warning and a canceled $1 billion stock issue, sending its shares down almost 11% on Friday alone. The company also said it may have to sell off some unspecified assets to raise cash.

Viacom was another exception to the buoyancy in the media patch, ending the week almost exactly where it began, at $34.90. Conglom, which owns cablenets MTV, VH-1 and Nickelodeon, and broadcaster CBS, said profits could be eroded by as much as $500 million by the end of 2001.

First Union Securities analyst Scott Davis trimmed his investment rating on Viacom shares to “market perform” from “buy” last week, citing concerns over whether the company’s growth rate justified its current value in the market.

“It is simply too hard to tell how bad the advertising market will get,” said Davis in a research note, noting that Viacom derives half its revenue from ads. “Visibility is very poor, which in and of itself argues for a cautious stance.”

More Biz

  • Sumner Redstone

    Sumner Redstone's Ex-Girlfriend Fights With Nurse For Access to Secret Tapes

    NEW YORK — Showbiz stocks continued to rebound along with the broader market last week from their post-terrorist attack lows, as the Street cheered the Fed’s latest interest rate cut and media investors took solace in encouraging comments made at a Goldman Sachs confab in Gotham. But the week’s gains were tempered by a mixed […]

  • Disney-Fox Deal Sets Up Scramble for

    Disney-Fox Deal Unleashes Flood of Free-Agent Executives, Talent

    NEW YORK — Showbiz stocks continued to rebound along with the broader market last week from their post-terrorist attack lows, as the Street cheered the Fed’s latest interest rate cut and media investors took solace in encouraging comments made at a Goldman Sachs confab in Gotham. But the week’s gains were tempered by a mixed […]

  • Paul Haggis Lawsuit

    Paul Haggis Hit With Lawsuit for Alleged Rape, Claims a $9 Million Shakedown

    NEW YORK — Showbiz stocks continued to rebound along with the broader market last week from their post-terrorist attack lows, as the Street cheered the Fed’s latest interest rate cut and media investors took solace in encouraging comments made at a Goldman Sachs confab in Gotham. But the week’s gains were tempered by a mixed […]

  • Sirius Logo

    SiriusXM Hit With Big Rate Hike by Copyright Royalty Board

    NEW YORK — Showbiz stocks continued to rebound along with the broader market last week from their post-terrorist attack lows, as the Street cheered the Fed’s latest interest rate cut and media investors took solace in encouraging comments made at a Goldman Sachs confab in Gotham. But the week’s gains were tempered by a mixed […]

  • Leonardo Da Vinci Salvator Mundi Auction

    How a Restored da Vinci Became the Most Expensive Artwork Ever

    NEW YORK — Showbiz stocks continued to rebound along with the broader market last week from their post-terrorist attack lows, as the Street cheered the Fed’s latest interest rate cut and media investors took solace in encouraging comments made at a Goldman Sachs confab in Gotham. But the week’s gains were tempered by a mixed […]

More From Our Brands

Access exclusive content