AdMarket 50 Sinks 6.4%

Package-Goods Giants Fare Relatively Well on Dread-Inducing Day

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LOS ANGELES (AdAge.com) -- The Ad Age/Bloomberg AdMarket 50 crashed 6.4% Sept. 29, its biggest percentage drop since the index began in 2000.

The plunge surpassed the 4.4% AdMarket drop that came when stock trading resumed after Sept. 11, 2001.

Still, the AdMarket -- an index of 50 marketer, media and agency stocks -- is "only" at a two-year low. The AdMarket -- and Dow Jones Industrial Average, for that matter -- remain far above the post-bubble lows seen in 2002.

Investors unnerved
But the AdMarket, and consumer stocks, were walloped Monday as investors bailed out of the stock market after the House of Representatives refused to bail out Wall Street.

The market theoretically could stabilize -- or even have a euphoric rally -- if Congress comes to terms on a bailout package.

Absent such an agreement, it's anybody's guess how far the markets and U.S. economy will fall. With tight credit markets, companies and consumers could face growing troubles gaining access to credit. Consumers have little incentive to make big commitments -- buying cars or houses, for example -- amid such uncertainty. The economy could find itself frozen.

Few gainers, many losers
Looking at Monday's wreckage, just two AdMarket issues posted gains: McClatchy Co., a newspaper publisher, and Entercom Communications, a radio-station company, each rose marginally. Financial stock American Express Co. saw the biggest AdMarket drop, down 17.6%.

Other seismic movers by sector:

Marketers: Ford Motor Co. (down 13.3%); General Motors Corp. (down 12.8%); Intel Corp. (down 10.1%); and Microsoft Corp. (down 8.7%). Auto and tech could be hammered if frightened consumers stop spending on big-ticket goods. Best-performing marketers: package-goods and food giants Coca-Cola Co., PepsiCo and Procter & Gamble Co., each down 3% or less. (Even in bad times, you have to eat.)

Media: Comcast Corp. (down 13%); IAC / InterActiveCorp (down 12.6%); McGraw-Hill Cos. (down 11.8%); and Google (down 11.6%).

Google closed at $381 -- about half the all-time high it hit last November ($747).

Sixteen stocks on the AdMarket 50 hit 52-week lows (and multi-year lows, in the case of some issues). Among those hitting 52-week lows:
  • General Motors; Toyota Motor Corp. (through its U.S.-listed shares); Intel.
  • Nine of the AdMarket's 19 media stocks, including Google, News Corp., Time Warner and Yahoo.
  • The three biggest agency firms (Omnicom Group, down 6.9%; WPP Group, down 13.3%; Interpublic Group of Cos., down 11.4%).
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