Downgrade by Thomas Weisel triggers fall
As concerns over a slowing economy stoked fears that a softening ad market will undermine studio earnings, Viacom and Disney shares posted sharp drops Monday in a Wall Street trading session that produced only mild dips in broad indexes.
Viacom’s most widely tracked Class “B” shares fell 5.5%, while Disney was off roughly 4%. Viacom, parent to the Paramount studio, was hit by a downgrade to “buy” from “strong buy” at investment bank Thomas Weisel Partners earlier in the day.
Elsewhere among studio parents, Fox Entertainment Group’s stock price shed 3.6%, Time Warner’s 3.1%.
Meanwhile, shares in Spanish-language TV broadcaster Univision Communications plummeted 13%, and radio stocks Westwood One and Cox Radio declined 6.4% and 4.6%, respectively. But TV station groups Granite Broadcasting and Young Broadcasting mounted gains of 38% and 5.5%, respectively, as investors keyed on takeover speculation that has swelled around the companies for weeks.