Showbiz Stocks Hit As Dow Plunges Over 300 Points

The Dow Jones Industrial Average sank more than 300 points on Thursday while the NASDAQ gave up 90 points as two weeks of seesaw activity in the major indices drove investor anxiety.

The Dow’s 334-point drop on Thursday came on the heels of a 272-point plunge on Tuesday followed by a 274-point rebound on Wednesday. Wednesday’s rally came after calming words from the U.S. Federal Reserve regarding interest rates staying low for the rest of this year.

News on Thursday that Germany’s export market had fallen to its lowest levels in nearly five years sparked fears that Europe may plunge back into recession. The Dow dropped nearly 2% to close at 16,659.25. The NASDAQ was down 2% to 4378.34.

Share prices for nearly all of the major media companies took a hit, despite the fact that stocks had surged on the interest rate news and lower domestic jobless numbers. CBS, Discovery and Viacom fell more than 3%. Comcast, Disney, Fox and Time Warner were down more than 2%. Netflix weathered the storm better than most, with a 1.1% drop, to close at $461.62.

Media companies have penned a lot of their future growth on foreign markets, so even though U.S. economic news has been promising, the uncertainty in Europe could imperil their opportunities for expansion. Globalization has goosed the share prices of the Disneys, Time Warners and Viacoms of the world, but that interconnectedness breaks both ways.

“As the U.S. has slowed down, Europe has become a more important source of growth,” said Tony Wible, an analyst with Janney Montgomery Scott. “Every company has its own unique issues, but the common thread is what’s happening across the globe.”

The correction may have been a long time coming, Wible argued. “There was a big run up and we need to give off some steam to get the stocks to where they need to be,” he said.

The markets have been noticeably choppy since the start of this month. Despite the a sense that the U.S. economy continues to improve, the major congloms have acknowledged recent softness in advertising sales — a sign that marketers are still hedging their bets.

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