Wall Street’s six-day losing streak was broken in a big way on Wednesday when the Dow Jones Industrial Average soared 619 points and notched its biggest one-day gain in four years. Once again, though, media stocks lagged behind.
The Dow’s gain amounted to 4 percent, but Walt Disney only rose 3 percent. Disney’s cautious comments about growth in its cable networks division on Aug. 4 have been blamed for a massive decline in the sector.
Other laggards included Viacom (up less than 1 percent); 21st Century Fox (up 2 percent); and Comcast, Time Warner and CBS (each up 3 percent).
Sony, though, managed to outperform with a 5 percent gain, perhaps because it doesn’t own cable channels, assets that some investors are fleeing from as competition from Internet streaming intensifies.
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Probably for the same reason, shares of Netflix rose more than 8 percent on Wednesday, while YouTube parent Google rose 8 percent and online retailer and video streamer Amazon.com was up 7 percent.
Despite Wednesday’s rally, media-entertainment stocks remain crushed since Aug. 4. Viacom, for example, is still off 31 percent and Disney is still down 18 percent.
Some see Wall Street’s rally as a dead cat bounce — a rally within an overall downturn in the markets.
MarketWatch, owned by Rupert Murdoch‘s News Corp, published a story on Wednesday headlined: “Dow’s rally looks like what technicians call a ‘dead cat bounce.'”
“Wednesday’s bounce might look even more like a dead cat given that the Dow had tumbled 1,682 points over the past four sessions, producing the first-ever four-session streak of 200-plus point declines,” wrote Tomi Kilgore of MarketWatch.
And Steve Birenberg of Northlake Capital Markets told The Hollywood Reporter on Tuesday that it could be another five weeks before stocks truly find a bottom.
“Violent moves like this in stock prices take time to repair. It is just natural that it is hard to wade back in after such a shock,” Birenberg said Tuesday, after Wall Street opened in rally mode only to close sharply lower.
Email: Paul.Bond@THR.com
