Dow the lowest it's been since 1997
NEW YORK — As a fresh setback Monday sent major indices plunging to mid-1990s levels, media companies generally kept pace with the market.
The Dow fell another 4% — the lowest it’s been since 1997 and less than half its all-time high above 14,000, reached in October 2007. Similarly dented was the S&P 500, which closed at 700.82, its worst finish since 1996.
General Electric, which cut its once-sacred dividend Monday and also faces exposure to suddenly turbulent Eastern European markets, dropped almost 11% to $7.60 — a 16-year low.
In a sign of GE’s desperation to shore up investor confidence, chairman-CEO Jeffrey Immelt on Monday spent about $413,000 of his own money to buy 50,000 shares in his company at $8.26 a share — which mean that Immelt lost $33,000 on the investment by the end of trading. Immelt owns about 1.7 million GE shares, according to the Associated Press.
GE vice chairman Michael Neal, who also heads the ailing GE Capital unit, also bought 50,000 shares on Monday at $7.90 a share.
Among the biggest pure media congloms, Disney was down 4% to $16.05; News Corp. dipped 5% to $5.28; Viacom dropped 6% to $15.75; and Time Warner gave up 3.5% to $7.36.
Charlie Ergen’s EchoStar got punished for mixed quarterly results, with shares declining almost 12% to $9.93.
EchoStar, which recently lost out on buyout bids for Sirius XM when EchoStar rival John Malone’s Liberty Media stepped in, managed to post a net profit in the fourth quarter.
Net income rose 24% to $217 million, but the satellite TV company said it lost 100,000 subscribers even as rival DirecTV was adding 300,000 in the same span.
Wall Streeters had little specific news on which to blame the drop. They simply cited continuing anxiety about financial institutions and the complexity and severity of the recession and credit crisis.
In particular, the day brought unnerving revelations about AIG. The mega-insurer received a fourth round of federal assistance of up to $30 billion to repair damage from some $500 billion in credit that it extended with little collateral to cover defaults.
The blitz came on a day when Gotham was blanketed by 10 inches of snow as a late-winter storm sent temperatures plummeting 20 to 30 degrees below normal.
Execs at major media congloms, having largely made it through earnings season, ducked the gloom in Gotham and flew to Palm Beach, Fla., for the 17th annual Deutsche Bank Media and Telecom Conference.
Time Warner chief Jeff Bewkes was among Monday’s speakers. He touted a multiplatform “TV everywhere” concept the company is testing with HBO.
Today Viacom topper Philippe Dauman is among the speakers on the docket.
The Dow was down 299.64 to close at 6,763.29. The S&P 500 shed nearly 5%, or 34.27.