Media companies sink after bailout defeat

Shares in The Walt Disney Co., whose theme parks business held up well against economic headwinds in the previous quarter, led the decline, falling 9.2 percent, or $3.02, to $29.73. Time Warner Inc. shares also fell 9.2 percent, or $1.31, to close at $12.90, while News Corp. shares fell 8.9 percent, or $1.18 to $12.07.

"The entertainment companies generate revenue from advertising, subscriptions and the sale of content. And I think you're going to see an impact on all three of them, with advertising being the most susceptible," said Christopher Marangi, an analyst with Gabelli & Co.

"There's a great deal of uncertainty about near-term earnings," he said.

But he predicted a comeback, sooner or later.

"Over the long term, these companies are producing products that the consumer wants," Marangi said. "The consumer will be back--it's just a question about how long that will take."

CBS Corp. shares were down 7.1 percent, or $1.10, to close at $14.30 and Viacom Inc. shares fell 7.3 percent, or $1.85, to $23.66.

Shares in Marvel Entertainment Inc., which made its debut as a movie producer with the release of "Iron Man" in May, fell a modest 4 percent, to $33.05, after it announced a five-film distribution deal Monday with Viacom's Paramount Pictures, including for "Iron Man 2" and "Thor" in 2010.

Marvel shares are still up 27 percent since the beginning of the year.

"We're very happy with the performance of launching our new studio and what that means for future growth," David Maisel, chairman of Marvel Studios, said in an interview Monday. "We're happy to see that reflected in our share price."