For a while it looked like stock prices were rebounding from Tuesday’s severe drop, but with no good news to counteract the previous day’s report from The Conference Board of a sharp drop in its Consumer Confidence Index a sell-off took hold late in the session. Since radio and TV ad revenues are directly impacted by the willingness of consumers to spend money, broadcasting stocks were among those hardest hit.
Although it had been up slightly in trading, the Dow Jones Industrial Average ended the day down 1%, with other major indices also falling again. For the quarter – Wednesday was the last day of Q2 – the DJIA was down nearly 10%.
Even with the big declines of Tuesday and Wednesday (and broadcasting stocks had been down slightly on Monday as well), radio and TV stocks still posted significant gains for Q2. The RBR Radio Index was up 13.3% for the quarter and the TVBR Television Index was up 7.6%. So, broadcasting stock prices have continued thus far in 2010 the recovery that picked up steam in the second half of 2009.
The hardest-hit broadcasting stock on Wednesday was Nexstar, down 9.7% to $4.35. Of course, you wouldn’t feel too bad about that if you bought the stock in October 2008 for 67 cents.
The day’s only big winner was ACME, up 8.9% to 98 cents as the company reported its delayed Q1 financial results after the market closed. You could have bought that stock for 16 cents back in February 2009.
RBR-TVBR observation: You can’t swim against the tide. Wall Street is in a gloomy mood, with the drop in consumer confidence coming on top of the Gulf oil spill worries. The fact that radio and TV ad sales are actually improving will not reassure The Street until larger economic trends become more favorable.