Bear Stearns sale has global effect
U.S. markets slide, but losses are worse in EuropeWorld markets, and key media stocks with them, were under pressure Monday after a fire sale of U.S. investment bank Bear Stearns, which had been pushed to the edge of bankruptcy by the current mortgage crisis, reinvigorated investor fears.
Sector stocks in Europe were harder hit than in the U.S.
The Hollywood Reporter Showbiz 50 stock index was mostly in the red at day's end, even though it recovered early losses in sync with broader markets, and a few outperformers like Carmike Cinemas managed to gain 13.2% and Blockbuster rose 2.6%.
Shares of such sector biggies as Viacom, Time Warner and News Corp. lost less than 1%, Disney was off 1%, and Sony's American depository shares fell 2.3%. The biggest decliners on the index, such as Live Nation and Dolby Laboratories, lost more than 6% in market value.
Overall, the Showbiz 50 finished down 1.5% at $1,024.44. That was a worse decline than the 0.9% decrease of the broad-based S&P 500 stock index.
In Europe, London shares were hit hardest by investors' sense that the economy there might follow what many expect to turn out as a U.S. recession. The FTSE 100 index fell to a 2 1/2-year low. London's top 100 share index fell by 217 points to 5,414, its lowest level since November 2005.
Shares in commercial broadcaster ITV hit a new low of 61 pence, down about 5% from Friday's closing, but recovered slightly to 63 pence ($1.26). The U.K.'s biggest mass-market channel recently steadied its share of the advertising market, but investors expect its shares to fall further when satcaster British Sky Broadcasting offloads some or all of its 17.9% stake.
BSkyB did not escape the slide into the red, either, slipping 2.2% to a low of 5.28 pounds, before finishing down at a slightly better 5.33 pounds ($10.65).
German stocks took a beating as Frankfurt's benchmark DAX index lost 4% of its value by midafternoon, falling below 6,200, the lowest level since October 2006.
KKR/Permira-controlled broadcasting giant ProSiebenSat.1 shed 4.6% to 12.80 euros ($20.13). And pay TV group Premiere, in which News Corp. holds a 20% stake, fell 4% to 12.60 euros ($19.82). The stock of one-time market darling, sports and merchandising firm EM.Sport Media, dropped a further 4.6% to 2.48 euros ($3.90).
The bear market could hardly have come at a worse time for ProSiebenSat.1, which has fallen sharply since its peak near 30 euros about a year ago and is struggling under 3.5 billion euros in debt from the acquisition of SBS Broadcasting last year.
French media giant Vivendi, which owns pay TV group Canal Plus, fell 2% to 23.92 euros ($37.62) on Monday. Among its peers, TF1 Group fell 3.4% to 13.72 euros ($21.58).
Georg Szalai reported from New York; Mimi Turner reported from London. Stuart Kemp in London and Rebecca Leffler in Paris contributed to this report.