While the static in radio stocks may eventually clear up, right now the sector's signal is starting to degrade. On Thursday, Moody's cut Cox Radio's long-term debt to Baa2, saying even with a moderate rebound in advertising spending, the company's financial leverage was greater than levels consistent with a Baa3 rating. "Radio advertising has been soft over the past year, and may remain weak," Moody's said in a statement. "
The agency expects risk associated with radio industry consolidation trends will continue and that Cox will seek to continue to grow through acquisitions that may be debt financed." Lately, Cox Radio was off $1.57, or 6.2%, to $23.69, while other radio stocks were also taking a hit. Clear Channel ( CCU - Get Report) -- the largest radio station operator -- was dropping $1.24, or 3.12%, to $38.46. ( TheStreet.com and Clear Channel Communications subsidiary Premiere Radio Networks share revenues produced by Jim Cramer's syndicated radio program.) Emmis Communications ( EMMS - Get Report) was losing $1.54, or 6.42%, to $22.60, and Westwood One was shedding $1.36, or 3.9%, to $33.54. to XM Satellite Radio and Sirius are starting to pick up."