On another day of wild swings on Wall Street, showbiz stocks on Tuesday made up a lot of the ground lost the previous day as the Dow and other indices staged a late mega-rally.
In a sign of the markets’ schizophrenia, CBS saw the biggest gains by far among the media congloms after getting pummeled the hardest on Monday.
CBS shares closed up nearly 15% to $24.48 Tuesday after taking a 10.3% hit on Monday. The volume of trading of CBS shares was, not surprisingly, almost three times higher than its recent average.
Overall, the Dow Jones Industrial Average spiked 429.92 points, up 3.98%, to 11,239.77, after a 634-point drop Monday. Tuesday’s big finish marked the Dow’s biggest one-day gain since March 2009. The Nasdaq also recovered a good chunk of its action, climbing 124.83, or 5.29%, to 2,482.52 after plunging 174 points Monday. The S&P 500 posted its best day in more than two years after losing 17% in recent weeks.
Tuesday’s ups and downs were affected by statements from the Federal Reserve that Wall Streeters read as a mixed message. The Fed’s Open Market Committee said it was discussing “the range of policy tools available to promote a stronger economic recovery” and that as it assesses the nation’s economic outlook, it is “prepared to employ these tools as appropriate.”
At the same time, the Fed statement acknowledged the elephant in the trading room, namely, that economic growth has been “considerably slower” than expected, with the employment picture deteriorating and household spending flattening out. The Fed vowed to keep interest rates status quo, at nearly zero, until at least the middle of 2013.
Showbizzers have been lamenting the timing of the market gyrations, with Big Media on a good run of reporting strong quarterly earnings. The market reaction to signs of continued turbulence for the economy, including Friday’s historic downgrade of the nation’s credit rating by Standard & Poors, has fueled investor concerns that media congloms could face a sudden hit if the country descends into a second full-blown recession.
All of showbiz’s major network-studio congloms posted gains on Tuesday. Viacom jumped 7.45% to $44.01. News Corp. rose 6.83% to $14.55. Disney, which unveiled its solid fiscal third-quarter earnings after the market closed, gained 5.06% to $34.70. Time Warner inched up 1.97% to $30.48 while Comcast upticked 1.35% to $20.70.
(The Associated Press contributed to this report.)