Cable stocks got hammered Monday along with the rest of the market, as
investors sold off in droves in the first day of trading after attacks on the
World Trade Center and the Pentagon last week.
The Dow Jones Industrial Average reported its largest single point loss in
history -- 684.8 points -- and the NASDAQ exchange fell 115.8 points, fueled
mainly by declines in the aviation and insurance sectors.
Advertising-dependent media companies were hit hardest in the cable sector,
with The Walt Disney Co. losing more than 18 percent, or $4.33 per share. USA
Networks Inc. -- which recently purchased online travel company Expedia.com,
another sector that was hurt by the tragedy -- dropped more than 20 percent, or
$4.62.
Gemstar-TV Guide International Inc. fell 25 percent, or $6.43 per share, to
close at $19.01. AOL Time Warner Inc. and Viacom Inc. each lost more than 12
percent of their stock value on the day.
Sanford C. Bernstein & Co. analyst Tom Wolzien said the downturn was
expected.
'The important thing is that we've got a market,' Wolzien said. 'The
important thing is that it opened and it stayed open the whole day. There were
four days of pent-up selling that had to get washed through.'
He added that cable operators fared better than programmers because of their
more stable subscription models.
One operator even showed a gain -- Cox Communications Inc. was up $1.11 per
share, closing at $39.90.
Other operators were not as lucky, with Adelphia Communications Corp. losing
the most ground -- 9.4 percent, or $3.04. Other big losers in the sector
included Cablevision Systems Corp. (down $2 each to $40) and Charter
Communications Inc. (down $1.25 to $18.55).
In the technology sector, the hardest-hit were Scientific-Atlanta Inc., down
10 percent ($1.81 per share) to $15.82, and Harmonic Inc., down 12.4 percent
($1.45) to $10.22. Motorola Inc. closed at $14.78, down just 26
cents.
