Wall Street: ADRs Media shares decline with broader market

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CHICAGO (AFX) - Media and entertainment stocks closed generally lower Tuesday, as the Dow posted its first loss for the year.

News Corp. -controlled DirecTV closed down 2.8% at $14.53. News Corp. Chairman Rupert Murdoch reportedly told investors at the annual Citigroup Media, Entertainment and Telecommunications Conference that DirecTV is nearing a strategy to enter the wireless high-speed Internet market.

Craig Moffett, analyst at Sanford Bernstein & Co., told clients Tuesday that he's skeptical about a wireless Internet product for DirecTV. Among other objections, he says the amount of spending necessary to acquire subscribers and handle other expenses would hurt DirecTV at a time when it is already facing high costs to upgrade its high-definition TV offering and deploy its own branded digital video recorders.

Further, said Moffett, a possible DirecTV buyback would be limited by capital expenses that would be put toward the broadband service.

The analyst also cited technological limitations that would hamper DirecTV. It's "highly unlikely," Moffett said, "that any available wireless broadband technology would provide sufficient bandwidth to offer real-time point-to-point streaming video, especially in HDTV."

Time Warner , the world's largest media company, was moderately lower at $17.50. The company's America Online unit said Tuesday it has acquired Truveo, a provider of an index that allows users to search for video over the Internet.

Financial terms were not disclosed.

Video has become an increasingly important part of Time Warner's attempt to transform AOL from a dialup access provider to a portal-driven entity and take advantage of both the increased penetration of high-speed Internet connections and rising online-advertising revenues.

Also lower among diversified media companies were Viacom and Sony , while Walt Disney Co. and News Corp. were higher. This story was supplied by MarketWatch. For further information see