1:00 PM UPDATE: There’s a lot of Big Media breaking news as the stock market had wild swings up and down today. (Keep refreshing…) All the stock market indices plunged, only to recover, only to plunge again, only to recover again. It’s incredibly alarming that analysts aren’t comparing this crash anymore to 1987 but to 1929. On the other hand, the G7 leaders are starting their weekend meeting to clean up this mess over commercial credit crunch worldwide. The Dow ended down 125+ points but it could have been way, way worse.

UPDATE: Entertainment media stocks dropped Friday as Viacom Inc and CBS Corp slashed profit forecasts. Sumner Redstone’s theater chain announced it would sell Viacom and CBS shares to pay down debt. Shares of Viacom, owner of Paramount Pictures and MTV Networks, nose-dived while CBS plummeted. Both Viacom and CBS blamed slumping advertising and a weakening economy for cutting forecasts for the year. “Given the rapid softening of the economy and the uncertainty this creates in forecasting advertising growth, we are taking the prudent step of moderating our near-term targets,” Viacom Chief Executive Philippe Dauman said in a statement.

Viacom said its full-year net earnings from continuing operations would grow in the “mid-single to low double-digit” percentage range, down from the “low double-digit” growth it predicted in July. CBS, however, said it expects 2008 adjusted operating income before depreciation and amortization to decline in the mid-teen percentages versus 2007, down from a July forecast of growth in the low single-digits. CBS reports third-quarter earnings October 30, while Viacom reports November 3. To add to the selling pressure, movie theater operator National Amusements Inc. said Friday that a subsidiary plans to sell $400 million of its nonvoting shares in Viacom and CBS to pay down debt. All three companies are controlled by Redstone. The subsidiary expects to sell approximately an equal dollar value of Viacom and CBS nonvoting shares.

General Electric reported a 22% drop in 3rd-quarter earnings, meeting its own lowered forecast and blaming the decline on its struggling finance arm. But profit for NBC Universal, which benefited from ad revenues for its Olympics coverage in Beijing in August, totaled $645 million, up 10% from a year earlier. So much for the argument that GE should sell NBC Uni because it does not fit the company’s industrial and commercial business mix. However, Immelt has defended the media franchise, and its performance in comparison with GE’s faltering financial business. “Cable and films had a solid quarter and the success of the Beijing Olympics showed the value of the network model,” Immelt said today.

DOW IN FREEFALL AGAIN: Below 8579; See Graphs Of Year-To-Date Media Stocks