Entertainment stocks mainly posted modest gains Friday, adding to Thursday’s surge, even as the broader stock market rally paused following a disappointing consumer confidence reading.
The Dow Jones Industrial Average and S&P 500 both dipped less than 1% in late morning trading after the indexes recorded their biggest one-day gains since 2020 on Thursday. The tech-heavy Nasdaq Composite hovered in positive territory.
Thursday’s rally followed news that inflation is easing, prompting hopes that the Federal Reserve will slow its interest rate hikes. The S&P 500 shot up 5.5%; the Dow gained 3.7%, or 1,200 points; and the Nasdaq soared 7.4%.
Friday’s consumer confidence reading helped dampen the market’s enthusiasm.
The University of Michigan said consumer sentiment fell to 54.7, a drop of 8.7% from October and nearly 19% from a year ago. Economists were expecting a reading of 59.5, according to a Wall Street Journal poll.
The measure had improved since June, but gave up about half its gains since then last month, said Joanne Hsu, the survey director, in a statement, pointing to rising interest rates and continued high prices across Americans of all demographics.
“Instability in sentiment is likely to continue, a reflection of uncertainty over both global factors and the eventual outcomes of the election,” Hsu said. Consumers continue to expect inflation to rise about 5.1%, up from 5% last year, in the coming year.
Expectations for a recession remain high despite slow growth last quarter, but entertainment companies may feel some benefit from consumers seeking affordable forms of amusement as times get tougher.
“Compared to other out-of-home options consumers have to choose from, going to the movies remains a very affordable form of local entertainment,” Cinemark CEO Sean Gamble said during the company’s third-quarter conference call last week. “Furthermore, it provides an often needed escape from reality during challenged times.”
Cinemark shares were flat in Friday trading, at $11.93. Rival AMC Entertainment, popular with day traders, gained 4.4% to $6.40, adding to its 18% leap Thursday. Imax Corp. added 3.8% to $14.23, after jumping 6% Thursday.
Shares of The Walt Disney Company added 2.7% following news that “Black Panther: Wakanda Forever” exceeded the original Marvel Studios release with a $25.2 million opening Thursday. Shares were trading at $92.90.
Paramount Global gained 2% to $19.84, building on its 6.7% gain Thursday. Warner Bros Discovery, which jumped nearly 10% Thursday, added another 4.6% Friday to $11.30. Sony Group was also up 2.6% to $82.61 after ending Thursday up 6.7%. Lionsgate Entertainment rose 2.6% to $6.60.
Streaming leader Netflix added 2.5% to $282.40, after an 8% gain the prior day. Amazon shares gained 2.5% to $99. Roku gained 3% to $57.16 and AMC Networks leaped nearly 7% to $20.60.