Dow, Nasdaq have healthy day
EmptyRELATED: Big media struggles in Q1
Stocks soared Tuesday and, for a change of pace, the media sector kept up with the broader markets on the first day of the second quarter.
Tuesday’s hefty 3.2% lift on the Dow Jones Industrial Average is being credited to an attempt by Lehman Bros. to shore up its balance sheet, a move that calmed fears that some of the country’s most important financial institutions are in more trouble than they can handle.
The Nasdaq leapt 3.7% on Tuesday, while the S&P 500 was up 3.6%. The Hollywood Reporter Showbiz 50 also surged 3.6%, with only two of the 50 stocks heading lower. That was good news after the index underperformed a down market in the first quarter.
Leading the Showbiz 50 pack were three smaller stocks: Warner Music Group, up 7.4%, Carmike Cinemas (6.5%) and Cumulus Media (6%), followed by the most valuable company on the index, Google, which rose 5.7%. Apple, the second-most-valuable company on the index, was up 4.2%.
XM Satellite Radio, not a member of the Showbiz 50 because of its presumptive merger with Sirius Satellite Radio, was lifted on news that its service is coming in an abbreviated form to BlackBerry users who will be able to subscribe to 20 channels for $7.99 a month.
XM was up 6.2%, but shares of Sirius were up just 1.1% on Tuesday. The index’s two falling stocks were Dolby Laboratories, off fractionally, and Yahoo, down 1.5%.
Dolby has been slumping since mid-January, its shares off 31% since then on concerns that the company, with its audio technology in a variety of consumer electronics products, is vulnerable in a weakened economy.
Yahoo trades according to the whims of Microsoft, which is trying to purchase the company for about $42 billion, and word surfaced Tuesday that the software giant isn’t keen on raising its bid.
While media stocks held their own during Tuesday’s big rally, the Showbiz 50 remains 14.9% lower year-to-date, while the S&P 500 is down only 6.7%.
Of the conglomerates, News Corp. outperformed all with a 4.3% move, making it No. 13 on Tuesday’s list of top movers. Sony, at No. 15, was next with a 4.1% move, and Time Warner was No. 16 with a slightly smaller gain.
Shares of TW are off 11% so far this year, which is why the company is no longer considered the world’s largest media conglomerate. That title goes to Disney with a market capitalization of $61.62 billion as of Tuesday, slightly ahead of News Corp. at $61.56 billion, according to Bloomberg.