NEW YORK — Another day on Wall Street, another record high on the Dow Jones Industrial Average — and showbiz stocks continue to rocket.
As the Dow closed up 27.65 points to a new high of 8,803.05 Thursday, Time Warner Inc. rose 94¢ to $73.06, News Corp. inched up 37¢ to $28.12 and Viacom jumped $1.31 to $52.43.
For both News Corp. and TW, Thursday’s closing prices marked historic highs. For Viacom, the close was just $1.56 away from the all-time high of $54 it reached in the fall of 1994 — shortly after the Paramount Communications and Blockbuster acquisitions were completed, but before a whole series of problems hit the company.
The only showbiz major not soaring is Walt Disney Co., which has been stalled in the past couple of weeks — since warnings about lower-than-expected March quarter earnings surfaced — and closed down $1.06 to $106.25 Thursday.
Cable stocks continued to dazzle investors as well. Chuck Dolan’s Cablevision Systems Corp. is particularly on a tear on Wall Street, its stock leaping $8 to $120.25 Thursday after Goldman Sachs & Co. put a “buy” recommendation on it. This is the second Wall Street firm to upgrade the stock in the past few days, after Salomon Smith Barney.
Most Wall Streeters said the report of Cablevision buying the New York Yankees — subsequently denied — did not affect the stock price. Cablevision stock is up 344% in the past year, from its low of $27.75, making it a standout performer in a time when most cable stocks have rallied strongly.
Other cable stocks haven’t been relaxing, however. Tele-Communications Inc. rose $1.68 to $32, Comcast was up 81¢ to $37.18 and TCI’s programming affiliate Liberty Media was up $2.56 to $29.25. A year ago, TCI was trading at $10.75, and Comcast was around $15.
Opinion is mixed on Wall Street about whether the entertainment sector can keep going higher, although most analysts agree that as long as the market is rising, showbiz will follow.
Some are more bullish than others. Merrill Lynch analyst Jessica Reif Cohen, for instance, says, “There isn’t a cable stock that I would not buy.” She predicts the cable sector will rise another 30% to 40%, because the fundamentals of the business are “solid” and there are potential new services and products which can add to cable revenues.
Others are wary. “Valuations are being ignored,” said Lehman Bros. analyst Larry Petrella, who noted that entertainment stocks were performing well because of the current low-interest-rate environment and perceptions of the industry as not as sensitive to economic downturns as some other businesses.
“It will take bad news to take these stocks lower at this point, and there is none that people are aware of right now,” he added.
Said Cowen & Co. analyst Harold Vogel, “You have to wonder how much you can stretch further without going out on thin ice.”