Viacom, AOL TW hit hard as market drops
Shares for congloms fall 7% and 6%, respectively
Viacom's mostly wide tracked Class "B" shares dropped 7% after Kaufman Bros. analyst Paul Kim downgraded the stock to "accumulate" from "strong buy," citing continuing advertising concerns. Also, Pittsburg Research dropped the stock from its "focus" list over fears Viacom faces asbestos litigation involving its CBS broadcast unit's former parent Westinghouse.
Viacom said Monday its reserves and insurance were sufficient to deal with any such fallout, and UBS Warburg analyst Christopher Dixon suggested in a research note that asbestos concerns were overblown. New York conglom's Class B shares closed down $4.23 at $41.20.
AOL Time Warner shares, which fell 6%, may be suffering from investors' gathering suspicion that CEO Gerald Levin's announced departure presages worse future financial results than previously forecast. Stock closed down $1.98 at $31.
Elsewhere in the sector, Sony shares fell $1.89, or 4%, to $46.61; Disney dropped 72¢, or 3%, to $21.63; and News Corp. dipped 41¢, or 1%, to $32.13. More thinly traded MGM shares managed a 1¢ uptick to $19.
Meanwhile, the blue-chip Dow Jones Industrial Average dropped 128.01, or 1.3%, to 9,921.45. The broadly structured S&P 500 was off 18.38, or 1.6%, at 1,139.93. And the technology-laden Nasdaq Composite Index was down 29.14, or 1.5%, at 1,992.12.
