Media Stocks Falter In Wall Street Sell-Off
Oil prices seemingly hurt entertainment stocks more than others.
A drubbing on Wall Street that many analysts attributed to falling oil prices seemingly hurt entertainment stocks more than others, even though media isn't generally associated with the energy sector and, in fact, could benefit from lower gas and utility prices.
On Friday, the Dow Jones Industrial average dropped 311 points, helping to cap off the worst week for stocks in four months.
While the S&P 500 was off 2 percent Friday and Nasdaq was down 2.2 percent, all but one of the large conglomerates fared worse, the exception being Sony, which was off just 1.2 percent.
Falling hardest Friday was Viacom, down 5.3 percent, followed by CBS and Time Warner, each off 3.5 percent. Comcast was down 2.9 percent, 21st Century Fox lost 2.8 percent and Walt Disney was down 2.5 percent.
New media was also hammered, with Netflix off 3.3 percent, Apple down 2.6 percent and Pandora Media down 3.4 percent.
Electronic Arts, though, was one of the rare winners on Friday, gaining 1.2 percent on news that it was creating EA Competitive Gaming Division for broadcasting live competitions involving its biggest video-game franchises, like Madden NFL, Battlefield and FIFA. The company made COO Peter Moore its chief competition officer, as well.
Movie exhibitors also fared better than the general market, perhaps on enthusiasm over Star Wars Episode VII — The Force Awakens, which opens Dec. 18. Carmike Cinemas rose fractionally while Imax, Cinemark and Regal Entertainment suffered only minor losses.
Another sector that did relatively well was live events, with Madison Square Garden and Live Nation each up fractionally.
Other than the few exceptions, carnage ruled the day. DreamWorks Animation lost 3.6 percent, Lionsgate Entertainment was down 3.3 percent. Outerwall, parent of the Redbox DVD kiosks, lost 4.7 percent.
Media stocks have been under pressure since August, when Disney and Viacom each warned of slowness at their cable TV channels amid growing competition from streaming services, which encourage consumers to cut or scale back their allegiance to traditional TV. Therefore, it was no surprise that TV companies were hammered yet again in Friday's sell-off.
Among those hit hard were Discovery Communications, down 3.6 percent, AMC Networks, off 2.1 percent, Starz, down 2.9 percent and Scripps Networks Interactive, off 4.3 percent.