Probe Mess Punishes Martha Stewart Stock

Updated from 1:46 p.m. EDT

Martha Stewart's image problems are finally hurting business.

Her company, Martha Stewart Omnimedia(MSO Quote), lowered its financial guidance for the third quarter on Wednesday, as the investigation stemming from her sale of ImClone stock has affected business, particularly advertising for the company's magazine. Investors have sold off the stock for the last month or so, since news of the investigation broke, shaving off nearly half the company's market value.

"Looking forward, we have begun to see some impact on our business resulting from the uncertainty relating to the investigations of Martha Stewart's stock sale," said CFO James Follo, in a statement. "Since those investigations are still pending, our ability to provide accurate guidance is constrained." ...