Dow Sets Record, No Thanks to Media Sector
Many media stocks including Disney, Comcast, Viacom and Netflix were down on Wednesday.
The Dow Jones Industrial Average on Wednesday closed above 23,000 for the first time in the index's 120-year-old history, continuing a bull-market run that has largely left the media-entertainment sector behind.
The Dow rallied 160 points to close at 23,157.60, though many of the stocks tracked by The Hollywood Reporter were down on the day, including Walt Disney, Comcast, Viacom and even Netflix, which dropped 2 percent.
Netflix has fallen 4 percent since reporting earnings on Monday, disclosing it added 5.3 million customers worldwide and also that it intends on spending $8 billion to acquire content next year.
But while Netflix is up 58 percent for the year and has outperformed the Dow's 17 percent rise, it is a claim most of the big entertainment companies cannot come close to making.
Disney, for example, is down 5 percent so far in 2017, while Viacom is off 25 percent, CBS is down 10 percent and 21st Century Fox is down 2 percent. Even among the gainers the sector lags the Dow, with Comcast up 6 percent and Lionsgate up 13 percent, for example.
An overperformer bucking the trend is Sony, which rose 1 percent on Wednesday and is up 33 percent on the year. Time Warner is up 7 percent, though its stock trades in a narrow range as it waits for regulators to bless its $85 billion merger with AT&T.
Some stocks that rose along with the Dow on Wednesday include AMC Networks and Discovery Communications, but those owners of cable networks have suffered as more than 17 million American consumers have already ditched their pay TV services. AMC shares have managed a 6 percent gain this year, while Discovery shares have sunk 28 percent.
Another subsector of entertainment that has fared poorly in 2017 is the movie theater chains. Regal Entertainment managed a small gain Wednesday but remains off 19 percent in 2017, while AMC Entertainment dropped 1 percent Wednesday and is down 58 percent for the year.
Cinemark and the Macus Corp. each dropped 1 percent Wednesday while Imax gained 3 percent, and those three are down 6 percent, 13 percent and 33 percent, respectively, in 2017. National Cinemedia, best known for the video ads it runs on movie screens prior to the trailers, gained 1 percent on Wednesday but is off 49 percent this year.
On Tuesday, B. Riley analyst Eric Wold lowered his price targets on AMC, Regal, Marcus and Cinemark on the expectation that the 2017 box office will be flat compared with 2016.