By David B. Wilkerson, MarketWatch
Last Update: 2:56 PM ET May 10, 2006
CHICAGO (MarketWatch) - Most media and entertainment stocks, down for most of the sesson, showed a few signs of life Wednesday afternoon after the Federal Reserve raised interest rates by a quarter percentage point to 5%.
Despite improvements in the economy over the past year or so, the advertising environment remains choppy. A cut in rates, or even a pause in the Fed's rate-rise cycle, would have been perceived as a possible catalyst for economic expansion and improved ad revenue in the second half.
Nonetheless, some stocks that had been down, including Gannett (GCI), New York Times Co. (NYT), and Dow Jones & Co. (DJ), the parent of MarketWatch, turned modestly higher.
Newspaper stocks remained generally lower, including Hollinger International. (HLR), Hollinger lost nearly 4% to $7.69 following its report of first-quarter results, which were hampered by advertising weakness at its flagship Chicago Sun-Times.
Media General (MEG), McClatchy Co. (MNI), Journal Register Co. (JRC) and Tribune Co. (TRB) were among newspaper decliners.
Disney (DIS) was up 1.7% at $30.08. The company said fiscal second-quarter net income rose to $733 million, or 37 cents a share, from $657 million, or 31 cents a share, in the year-earlier period. Sales were $8.03 billion vs. last year's $7.83 billion, bolstered by a strong performance at Disney's broadcast and cable television networks.
Analysts said Disney should be on track to meet its goals of double-digit earnings growth for the fiscal year, which ends in September.
Most diversified entertainment stocks were lower on the session, including Sony (SNE)(6758), Viacom (VIA.B) and CBS Corp. (CBS). Time Warner (TWX) edged 1.1% higher to $17.24.
In the radio sector, Cumulus Media (CMLS) was up 6.7% at $12.33 after it said it would buy back 11.5 million shares at $11 to $12.50 each.
Other radio stocks, some of which were down earlier, were up slighlty, including Radio One (ROIAK) and Saga Communications (SGA).
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