Stock Market Ends Week On Upswing As Media And Tech Firms Stop Bleeding
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The stock market finished a volatile week on the upswing Friday as virtually all media and tech issues managed to reverse their recent slides.
The Dow Jones Industrial Average posted its second straight day of gains, rising 309 points to finish at 25,889.33, after an alarming 800-point dive Wednesday, the worst drop of 2019. The Nasdaq and S&P 500 also returned to the black.
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Anxiety over the “yield curve” — a measure of short- and long-term interest rates that has shown signs of recession — as well as the trade war with China have spooked investors in recent days.
The media and tech sectors showed strength that were modest but spread across almost every stock.
All of the market gyrations and uncertainty came on the week that Viacom and CBS finally announced their long-expected merger. The deal, unveiled Tuesday, is a $30 billion, all-stock transaction. The two trading days after the announcement, though, shaved about 11% off the value of both stocks.
The downturn in four of the previous five sessions ended Friday, with a 1% uptick in CBS and a fractional gain for Viacom not erasing the 11% downturn since the companies merger announcement — a $3 billion hit on paper.
Two analysts offered bullish takes on ViacomCBS on Thursday and Friday to counter some of the pessimistic views on Wall Street. In a note to clients, Jessica Reif Ehrlich of Bank of America Merrill Lynch said, “While it is difficult to pinpoint the exact sources of investor concern, we remain confident in the upside case.’
Alan Gould of Loop Capital cited the combined company’s streaming assets as a key reason for his upbeat view. “We believe the average viewer will take 3-4 OTT services,” he reasoned in a research note. “Netflix and Disney will likely be the top two choices for most consumers, but we believe CBS All Access and its compelling products to be the third or fourth choice and expect Pluto to continue to grow quickly as a free service.”
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