Disney Leads Media Stocks Lower During Miserable Session on Wall Street

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Disney CEO Bob Iger

The media conglomerate received a downgrade from Barclays, which doesn't think movie franchises from Marvel, Pixar and 'Star Wars' are as lucrative as some might think.

In yet another miserable day for media-entertainment stocks, Walt Disney shares dropped 5.2 percent during Friday's broad sell-off where the Dow Jones Industrial Average lost 391 points.

The catalyst for Disney's big drop was likely a downgrade from Barclays, which not only frets about a slowdown at ESPN — as many analysts have — but also says the studio business isn't as great as some believe, despite the conglomerate's hit franchises from Marvel, Pixar and Star Wars.

Lionsgate's stock hit a 52-week low on Friday.

Media shares largely underperformed last year and have started off the new year in much the same way, dropping even more than broad indexes. One notable exception is Time Warner, which has been propped up by rumors it is an acquisition target.

Companies with significant exposure to television are underperforming as Wall Street tries to figure out the fallout from the estimated 1.1 percent of Americans who might cancel their subscriptions to cable TV each year.

New-media companies, which presumably could benefit from consumers who are fleeing traditional TV for digital alternatives, aren't faring too much better. The entire market has been roiled on concerns about an economic slowdown in China and slightly rising interest rates in the U.S.

There were few places for investors to hide on Friday, as the broad Standard & Poor's 500 index sunk 2.2 percent. Besides Disney, here are some of the notable entertainment-media stocks that underperformed:

Twitter, down 5.6 percent;

Pandora Media, down 4.6 percent;

Sony, down 3.9 percent;

Yahoo, down 3.9 percent;

Viacom, down 3.8 percent;

Lionsgate, down 3.4 percent;

Netflix, down 3.8 percent;

Dish Network, down 3.5 percent;

Facebook, down 3.4 percent;

TiVo, down 3.2 percent;

Google, down 2.9 percent;

Imax, down 2.5 percent;

Apple, down 2.4 percent;

Sirius XM Radio, down 2.4 percent;

DreamWorks Animation, down 2.3 percent.

Here are some entertainment-media stocks that outperformed on Friday, including a few that actually closed higher:

Electronic Arts, up 2.5 percent;

E.W. Scripps Co., up 2.5 percent;

RealD, up 2.1 percent;

Regal Entertainment, down 0.6 percent;

Time Warner, down 1.3 percent;

Starz, down 1.3 percent;

Activision Blizzard, down 1.4 percent;

Discovery Communications, down 1.6 percent;

CBS, down 1.8 percent.

Email: Paul.Bond@THR.com

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