Dow down 17; USA, other media stocks socked
U.S. markets and some media stocks stabilized Tuesday, but analysts continued to tinker with ratings on company shares, while congloms, including USA Networks and E.W. Scripps, said recent dramatic events will hurt their quarterly financial results.
The Dow Jones Industrial Average slipped 17.30 to 8,903.40 after moving within a range of 50 points up or down throughout the second day of market trading following the Sept. 11 terrorist attacks.
The broadly based Standard & Poor’s 500 was down a slim 6.03 at 1,032.74, one day after sliding almost 5%. The technology-laden Nasdaq Composite Index shed 24.47, or 1.6%, compared to its nearly 7% plunge a day earlier.
Shares in Dow component Disney, which plummeted 18% Monday, were off another 85¢, or 4%, to $18.40. Most other media stocks saw smaller second-day setbacks, but there were some other continuing trouble spots.
USA, hammered by a 20% selloff Monday, said its third-quarter profit will fall below earlier estimates, as sales on its Home Shopping Networks dropped after last week’s disasters. USA shares shed another $1.90, or 10%, to $16.55 on that pronouncement.
Scripps, which operates a large TV stations group as well as various cable webs, said its earnings will miss estimates for both the third quarter and the year due to the likelihood of a prolonged ad slump after the recent news events. Scripps shares declined $1.29, or 2%, to $60.10.
General Electric shares fell $1.30, or 4%, to $33.85, with conglom currently challenged on several fronts. Its NBC broadcast web has lost millions in ad revenue during commercial-free blocks of news programming, and declines are expected in its insurance, leasing and aircraft-engine units.
Viacom saw its most widely tracked Class B shares drop 90¢, or 3%, to $31.90 — a new 52-week low — as CBS parent feels a pinch from lost ad revenue. Jefferies analyst Fred Moran downgraded the stock to “hold” from “buy” on Tuesday, even as Kaufman analyst Paul Kim raised his rating to “strong buy” from “buy.”
Kim also upgraded his rating on AOL Time Warner to “buy” from “hold.” AOL shares gained 45¢, or 1.5%, at $30.45.
JPMorgan H&Q analyst Paul Noglows reiterated a “buy” rating on AOL Time Warner. Noglows cited strong growth in subscribers at America Online.
Elsewhere in the sector, News Corp. fell $1.95, or 7%, to $24.45; Vivendi Universal fell $2.04, or 5%, to $39.56; and Sony fell 65¢, or almost 2%, to $36.35 on Tuesday. MGM climbed 20¢, or almost 1.4%, to $14.75, and TV station group Young Broadcasting fell 12¢, or less than 1%, to $19.90.