NEW YORK — Cable stocks, which have been caught up with the Internet rally for the past few months, are now slumping along with their ‘Net brethren.
Most cable stocks fell sharply Tuesday for the second day running as a correction in the high-flying Internet sector deepened. As Yahoo dropped $10.93, or 8%, to $126.93 Tuesday and Amazon fell $5.75, or 5%, to $111.75, Adelphia Communications plunged $5.87 to $74 after a bigger fall Monday.
Time Warner, trading last week around $73, closed down 43¢ to $67.37 Tuesday.
Cable stocks had been infected by the Internet fever because cable systems are expected to benefit from Internet usage through high-speed modems.
Closet ‘Net stox
“Cable stocks are closet Internet stocks,” Sal Muoio, principal of money managers SM Investors, said Tuesday.
Cable stocks are also losing ground because of signs that interest rates may soon be headed upward. “These things are interest rate sensitive,” said SG Cowen Securities analyst Gary Farber.
Farber added that a rally in the cable sector since AT&T won the MediaOne bidding war had also made a sell-off inevitable.
Comcast closed down $2.25 to $36.37, while Cox Communications fell $1 to $40.50 and Cablevision Systems lost $3.43 to $79.81.