Gaming stocks slide with rest of market

John Wilen

Tuesday, Sept. 1, 1998 | 11:03 a.m.

Gaming stocks were hammered along with the rest of the market Monday in a session analysts say reflected a weakening global economy.

"You saw it everywhere," said Andrew Zarnett, an analyst at Ladenburg Thalmann & Co., in New York. "Nobody was left untouched."

On a day that saw the Dow Jones Industrial Average plummet 512.6 points to 7539, its lowest level since November 1997, gaming stocks also declined.

Most traded at, or near, one-year lows.

Among the gaming stocks reaching new 52-week lows were Circus Circus Enterprises, which closed at 10 1/4, down 1 3/8; Harrah's Entertainment, which closed at 14 7/16, down 1 1/4; Starwood Hotels, which closed at 36, down 3 3/4; Mirage Resorts, which closed at 14 7/8, down 1 1/4; and Primadonna Casino Resorts, which closed at 7 5/8, down 3/8.

Trading near their one-year lows were Grand Casinos, which closed at 8 3/4, down 1/2; Hilton Hotels Corp., which closed at 20 3/4, down 3/16; Rio Hotel & Casino, which closed at 14 15/16, down 1/16; and Station Casinos, which closed at 5 1/2, down 3/16.

Shares of MGM Grand fell 15/16 to close at 28 1/4, almost 1 3/4 above its one year low. Bucking the market, shares of Boyd Gaming rose 1/8 to close at 4.

The selloff was balanced, said Zarnett. Occasionally in selloffs, investors forget about some stocks, leaving them untouched, while dumping others en masse. That did not happen Monday, he said.

"Today, they took them all down," Zarnett said. "Everybody was down, sort of proportionally to their price."

Though gaming stocks have been weak of late, Monday's selloff had much more to do with global events -- namely the financial crises in Asia and Russia -- than with gaming industry fundamentals, said Zarnett.

"This was a market devaluation," he said.