Media shares post gains but GE stumbles
NEW YORK — Stocks bounced back Wednesday to break a five-session losing streak, and bargain-priced media shares posted gains pretty much across the board.
One notable exception was GE. Shares in the NBC Universal parent reached an 18-year low, slipping almost 5% to finish at $6.69.
The Dow climbed more than 2% on the day to close at 6875.84, boosted by news of China’s investment in infrastructure (using U.S. companies’ goods and services) and President Obama’s bid to give homeowners mortgage relief. Other major indices also surged, having slumped in the past week to levels not seen in more than a decade.
GE shares were down 18% at one point in the day as Wall Street reacted to analyst concerns about widening exposure to bad loans in the troubled finance arm. The company vigorously denied reports it would need outside funding sources to help shore up GE Capital.
GE stock, for so long a model of consistent returns, has plunged more than 50% since the start of the year. During this year-plus period of struggle, NBC U has actually posted some strong quarterly numbers, but it remains only a small part of the empire at 9% of total revenue.
Meanwhile, showbiz’s major congloms rose along with the broader market.
Time Warner gained 3% to $7.49; Viacom was up 3% to $15.49; News Corp. rose 5% to $6.42; Disney gained 3.5% to $16.94; and Sony was up 5% to $18.48.
CBS rebounded from a 10% loss Tuesday to close up 7% at $3.85.
Ailing Blockbuster, which plummeted 77% Tuesday on a rumored bankruptcy filing, more than doubled Wednesday to 47¢. Rival Netflix tacked on another 4% to hit $37.71.
Netflix, whose service has continued to add subscribers during the downturn, has seen its shares rise 26% since the start of the year as it emerges as a logical recession play for investors still willing to buy into this market.
Would that it were easy trying to play stocks based on companies’ recession-proof qualities, however.
Theatrical B.O. is up about 17% this year, a spike largely attributed to auds wanting a reasonably priced escape in hard times. Yet the top publicly traded exhibs have not been great investments over that span.
Regal Entertainment Group, the largest U.S. exhib by screen count, saw a 4% rise in shares Wednesday to $9.90. But the stock is down 3% year to date.
Carmike Cinemas, one of the top U.S. circuits with 250 theaters and 2,300 screens in 36 states, chose a promising day to announce “Stimulus Tuesdays.” Starting next week, all 16-ounce drinks and 46-ounce popcorns will cost $1 on Tuesdays. Company shares nevertheless dropped almost 7% Wednesday to finish at $1.41, just 4¢ above their 52-week low.