UPDATED at market close
Stocks rallied sharply Monday with many media shares outpacing the broader market as Wall Street – at least for today – evinced a glimmer of hope at the U.S. trajectory of the coronavirus pandemic, even as Wall Street analysts have only begun to calculate the dire impact of the virus on corporate finances for the current quarter.
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That said, the Dow Jones Industrial Average started strong and ended stronger, surging by more than 1,600 points, or 7.5%, with showbiz shares even more buoyant than other sectors. Among beleaguered theater stocks, AMC Entertainment was 25%. Marcus, Cinemark and National Cinemedia were higher by, respectively, 12%, 10% and 8%. Leveraged AMC is running out of cash fast and it’s hoping for government help and that cinemas will be opening in June.
Among broadcasters, Sinclair is up a hefty 16% and Nexstar up 15%.
Live Nation, whose concerts have been canceled around the world, saw shares nose up by nearly 3%.
Also upbeat, Fox was up 13%, AMC Networks 10%, Lionsgate gained 9%, Discovery 7%, Disney 5% and Netflix 5%, Comcast nearly 7%.
Spotify stock began as the only down stock in a list of 40 media stocks Deadline follows after an analyst from Raymond James earlier Monday cut its recommendation from ‘strong buy’ to ‘market perform’, citing less engagement and fewer downloads and growing competition from Amazon music in the U.S. to to higher smart speaker use. But even Spotify turned positive, closing up 0.53%.
Tech was strong as Twitter rose 7.9% and Google parent Alphabet 8%.
Apple gained nearly 9%.
The sense over the weekend was that coronavirus cases around the world were growing more slowly. The U.S. epicenter, New York City, reported 594 deaths Sunday, down from 630 on Saturday. Italy, France and Spain also reported a slower rise in death tolls.
Economists expect the economy has entered a recession and will trough with a contraction of about 30% in second quarter GDP. But they also expect a springing back of varying degrees, beginning in the third quarter.
Still, pundits urged caution. Markets have been immensely volatile for weeks. With health systems strained, economic activity at a trickle and unemployment surging, there’s still little visibility in how long the situation will drag out and if the government’s $2 trillion package will be enough to see companies and individuals through the worst.
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