Media stocks slide as worries overtake markets

NEW YORK (Hollywood Reporter) - Big-media stocks such as CBS Corp and News Corp tumbled Monday amid broader declines in the U.S. and Europe driven by renewed economic concerns and doubts that the recent rally can continue.

U.S. markets have moved higher since a low point in early March, driven by optimism that the worst of the economic downturn might be over, and media and entertainment stocks often outpaced the overall gains.

Still, economic growth seems unlikely to return until later this year and likely will be anemic, raising questions about how sustainable the upward momentum in markets is. That has led to market stutters as of late. Media and entertainment investors also have waited for signs of a real improvement in advertising trends.

The Wall Street Journal on Monday highlighted the raging debate among investors over U.S. stock markets' outlook, pointing out technical indicators that are red flags for further gains.

Also, the World Bank cut its economic forecasts for most regions.

"The world is entering an era of slower growth," it said, predicting a global economic decline of 2.9 percent this year. This will turn into global growth of 2 percent in 2010 and 3.2 percent in 2011, it said. Many developing countries will lose their status as engines for the global economy over the near term, it suggested.

All this pressured stocks, as the broad-based S&P 500 index tanked 3.1 percent. It now off 1 percent for the year-to-date period. The Dow fell 2.4 percent, and the Nasdaq 3.4 percent.

Amid big-media leaders, CBS Corp. shed 6.8 percent to $6.84 and is now down 14.7 percent year-to-date, and News Corp. shares fell 5.2 percent to $10.11 (6.6 percent for the year). Time Warner and Walt Disney shares dropped 3.7 percent each to $24.22 (down 10.7 percent for the year) and $22.66 (down 0.1 percent), respectively. Viacom declined 5.3 percent to $23.22 (up 15.4 percent for the year).

(Editing by Dean Gooodman at Reuters)