Hits keep coming for Showbiz stocks

Major indexes down as price of oil leaps

Conventional wisdom dictates that a weak economy and high gas prices won't hurt entertainment companies -- and could even help them.

Tell it to Wall Street.

On Monday, a controversial government bailout plan was debated and oil notched one of its biggest one-day price gains in history, both good excuses for the major indexes to fall hard. Not as hard, though, as The Hollywood Reporter Showbiz 50, which lost 4.4% with only four of the stocks rising.

By comparison, the Dow was off 3.3%, the S&P 500 was down 3.8%, and the Nasdaq closed 4.2% lower.

Leading the Showbiz 50 decliners was Blockbuster, which was crushed for 15.4% on no news. The index's biggest gainer was National CineMedia. The in-theater advertising firm saw its shares jump 6.9%, also on no news.

Among the conglomerates, News Corp. suffered most, down 6.8%. Viacom was off 4.7%, Time Warner 4.5% and Disney 4.3%. Sony and CBS, though, beat the averages, falling 1% and 1.9%, respectively.

Weighing down the sector might be the revelation that the national TV scatter market is finally showing signs of weakness, one money manager said Monday.

"When media stocks have rallied it has been because investor confidence in the economic outlook has improved," said Steve Birenberg of Northlake Capital Management.

"Media stocks will rally again when investors again improve their outlook," he said.

Birenberg added, though, that advertising tends to lag into and out of economic slowdowns, so it could be a long time before media stocks recover to any meaningful extent.