It’s being called “Black Monday” — stocks plunged amidst a worldwide selloff influenced by deep losses on the Chinese stock market, a slowdown in the country’s economy and the devaluation of its currency.
The three major indices fell sharply and made up nearly all their losses before falling again in the afternoon. The Dow Jones Industrial Average fell as many as 1,000 points but ended the day down 3.6 percent, shedding over 588 points before closing at 15,871.35. The Nasdaq, on which two music stocks trade — only a small number of music-specific companies are publicly traded — fell 3.8 percent to 4,526.25. The S&P 500 ended the day down 3.9 percent at 1,893.21.
Concert promoter Live Nation escaped relatively unscathed, dropping 1.6 percent to $23.98, the smallest decline of the four pure-play music stocks on the U.S. markets. The other publicly traded music promoter, SFX Entertainment, fell 5.6 percent to $0.85 — although it has different troubles. SFX shares have been pummeled in recent months as a takeover plan by chairman and CEO Robert Sillerman was proposed, accepted, delayed and abandoned. SFX is down 36.1 percent over five days, 78 percent over 30 days and 81.2 percent year to date.
Radio stocks had deep declines. SiriusXM Radio dropped 3.0 percent to $3.61 on Monday. Pandora fell 4.0 percent to $17.13.
Declines of these sizes aren’t unheard of. A stock can drop or gain 3 percent after downgraded or upgraded by an equity analyst. But Monday was only the latest turbulent day. Many stocks also suffered deep losses on Friday. Most are in negative territory so far this year. Currently up 3.1 percent, SiriusXM is the lone music stock in positive territory in 2015.
Some companies that work within the music business have also taken a beating. Madison Square Garden Entertainment fell 4.4 percent. Apple fell just 1.7 percent on Monday but is down 11.3 percent over the last five days and 16.5 percent over the last 30 days. Google and Amazon have been only slightly slowed by recent events. In spite of its 3.3 percent drop on Monday, Google is up 17.3 percent in 2015. Amazon dropped 6.2 percent on Monday but remains up 49.4 percent on the year.
What might happen after Monday’s carnage? Today’s “Black Monday” was nothing close to the “Black Monday” on October 19, 1987. That day the Dow Jones Industrial Average fell 22.6 percent — still a record high in percentage terms — because of a perfect storm of global factors. But the market didn’t slide into the abyss, instead rebounding and reaching pre-crash levels in early 1989. That’s not to say U.S. markets will rebound, but markets corrections happen more often than depressions and recessions.