The Dow Jones Industrial Average fell nearly 3,000 points Monday (March 16) as investors, fearful of the long-term economic impact of the coronavirus outbreak, worried that federal recovery efforts won’t be enough to stop another recession.
Stocks fell 13% Monday (after another trading halt at the start of the day) to 20,188.52, down 2,997.1 points (its worst single day since 1987) as investors fretted that moves by the government over the weekend won’t be enough to prevent a worldwide recession. On Sunday, March 15, the Federal Reserve dropped its benchmark interest rate to near 0%, and pledged to purchase $700 billion in government bond debt, moves investors took more as a sign of bad things to come.
While restaurant and hospitality stocks seemed the hardest hit -- some down nearly 40% Monday -- as Americans were urged not to leave their homes, media stocks, which were supposed to benefit from that restriction, also took it on the chin.
The downturn erased a near 2,000-point gain in the Dow on Friday amid hopes that the federal government would step in to avoid an economic disaster. While the stimulus package was reminiscent of the 2008 federal bailout, that may have been the problem. With such a massive effort underway so soon, some investors may have seen it as a sign that things are only expected to get worse.
That sentiment trickled down to the cable sector, which just days before was expected to benefit as an increasingly home-bound populace would likely spend more time taking advantage of their pay TV subscriptions and watching streaming video. While that may still be the case, investors had other things to worry about.
In a press conference March 16, after admitting the coronavirus pandemic could take at least until July or August to control, President Trump acknowledged the sharp stock market decline, telling reporters that the U.S. “may be” headed into a recession, before adding that he expects a “tremendous surge” once the virus runs its course.
On the pay TV side, Altice USA led the decline for cable stocks, down 23% ($5.02 each) to close March 16 at $17.20 per share. The rest of the sector fared a little better, with Charter Communications down 14.3%, CableOne off by 13.4% and Comcast down 8.4% on Monday. As a whole, the sector was down about 32% since Feb. 13.
Satellite TV giant Dish Network fell 13% ($2.80 each) to $18.79, culminating a month where it lost more than half of its value, when Dish shares were priced at $40.18 each.
AT&T, which expects to launch its HBO Max service in May, fell about 7.7% ($2.66) to $31.81 while its telco counterpart Verizon Communications dipped 6% ($3.18) to $50.99 each.
It continued to be a tough day for programmers. The Walt Disney Co. stock fell 7.3% to $95.01 each while ViacomCBS dipped 17% to $13.61 per share. Discovery fell 10% to $20.63 and Fox Corp. was down 8.2% to $24.01. AMC Networks finished the day up slightly, closing Monday at $28.06 each, an increase of 12 cents per share, or less than 1%.