Street turns corner

Showbiz stox climb after 30% plunge in 3rd qtr.

NEW YORK — Shares of the five biggest showbiz congloms plunged more than 30% collectively for the third quarter ended Friday while the Dow Jones Industrial Average lost 16%, despite a rally last week that pulled many stocks off terrorism-induced lows.

The Dow, which was closed a record four days following the Sept. 11 attacks on the World Trade Center and Pentagon, has been experiencing very different moods in the two weeks since reopening.

The index crashed 14% in its first week of volatile trading but made about half that back last week as investors sniffed bargains and hope emerged that the U.S. economy will pull through the current downturn.

Media stocks, pounded by sluggish advertising and, in some cases, empty theme parks, have been among the sectors hardest hit by slow growth both before and decidedly after Sept. 11. They pulled higher Friday as well. Walt Disney closed at $18.62, up 6.10% for the day but down 36% for the quarter.

At $33.10, AOL Time Warner was up 2.32% for the day but off 37% for the quarter. News Corp. rose 2.21% Friday to close at $24.10, down 35% for the quarter, and Viacom rose 1.5% to $34.95 for the day but lost 34% for the quarter.

Vivendi Universal eased 0.96% to $46.35, down 20% for the quarter. The uptick last week and Friday came in large part from conflicting economic indicators, which were rather dire yet not quite as black as some anticipated. Also, the Federal Reserve Bank is expected to lower interest rates — for the ninth time this year — when it meets on Tuesday.

Better than expected

According to final statistics released Friday, U.S. gross domestic product grew by 0.3% in the second quarter — the slowest growth in seven years but still higher than the bare 0.1% gain expected by economists. Still, that number doesn’t figure in the events of Sept. 11.

Another indicator, a measure of consumer confidence, fell to its lowest level in nearly eight years, but also beat forecasts.

Most analysts continue to worry about the direction of the stock market, predicting the economy will slip into recession (two consecutive quarters of contracting growth) in the third or fourth quarter. Also, earnings will start rolling in soon and are likely to be lower across the board. Most of the big media companies have already issued profit warnings.

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