Media shares mixed in soft market
TW, News Corp., Viacom among winnersNEW YORK -- Most U.S. markets closed lower Wednesday amid a late drop following more bad earnings news and renewed economic concerns.
Shares of big media and entertainment companies seemed to keep their recent upward momentum going until the afternoon before economic concerns pulled them and others back to the ground.
In the end, Time Warner shares edged up 0.5% to $22.33, with News Corp. up the same percentage to $8.74. Viacom Inc.'s stock climbed 0.5% as well to end at $19.95. Earlier in the day, they had all traded higher. Walt Disney's stock closed down 0.4% at $19.40, and CBS Corp. shares shed 4.2% to close at $5.92.
The Hollywood Reporter Showbiz 50 stock index also closed the day 0.1% lower at 795.49 after early gains. Before Wednesday, the index had gained in four out of the last four trading sessions. The broad-based S&P 500 index fell 0.8%.
The moves came after a downbeat earnings report from the likes of Morgan Stanley and more mixed economic views.
The IMF on Wednesday unveiled reduced economic forecasts for various regions of the world. It said that the global downturn has become "the most severe recession since World War II" and projected that the world economy would shrink by 1.3% this year, with a slow recovery expected to take shape some time next year that should lead to 2010 growth of 1.9%. The IMF called this "sluggish relative to past recoveries." However, it said the rate of economic contraction should moderate from the current second quarter onward.
The U.S. economy is already starting to show signs of a slowing downturn, but growth will likely only return next year. The organization cut its 2009 and 2010 U.S. forecasts, predicting a flat GDP performance next year.
A growing chorus of economists has in recent weeks predicted that the economy would stabilize by the summer, come in about even compared with the year-ago period in the third quarter and start growing year-over-year in the fourth quarter, if only slightly.
Meanwhile, General Electric chairman and CEO Jeffrey Immelt said Wednesday at the annual shareholder meeting of the conglomerate in Orlando that it is hard to forecast how quickly the recession will end. "The global economy and capitalism itself have been fundamentally reset," he said.