Wall St down as media stocks take beating

Trader Joseph Lawler works on the floor of the New York Stock Exchange. File photo / AP

Wall Street moved lower amid a slump in media stocks including Viacom on disappointing earnings and concern about their profit outlook.
Shares of Viacom sank, last 12 percent lower, after the company posted lower-than-expected quarterly sales.

Shares of Walt Disney fell, extending Wednesday's 11 percent slide after the company downgraded the profit outlook for its cable networks unit.

Other media stocks including Twenty-First Century Fox and CBS also fell. Fox last traded 6.8 percent lower, while CBS was 1.3 percent weaker.

"As of now, after Disney all the media stocks are down and it seems people just want to get out of the sector at any cost and take any loss," CLSA analyst Vasily Karasyov told Reuters. "The selling pressure is relentless."

In late trading in New York, the Dow Jones Industrial Average slid 0.74 percent, the Standard & Poor's 500 Index fell 0.77 percent, while the Nasdaq Composite Index dropped 1.61 percent.

Declines in shares of Microsoft and those of Walt Disney, last down 2.5 percent and 2 percent respectively, led the Dow lower.
"Some of the action you're seeing today are US$50 to US$100 billion companies dropping 8, 9, 10 percent," Walter Todd, chief investment officer for Greenwood Capital Associates, told Bloomberg. "The reactions you're seeing in the marketplace are just very violent for companies reporting earnings, sometimes to the upside, sometimes to the downside."
Other stocks punished for reporting earnings that failed to meet the mark included Tesla, last 10.1 percent lower, and Keurig Green Mountain, last 29 percent weaker.

Shares of Chevron and those of Exxon Mobil bucked the trend, rising 1.3 percent and 1.2 percent respectively, for the largest percentage gainers in the Dow.
The latest US jobs data heightened anticipation for Friday's government nonfarm payrolls report, and its implications for the timing of a Federal Reserve interest rate.

Initial claims for state unemployment benefits rose by 3,000 to a lower-than-expected seasonally adjusted 270,000 for the week ended August 1.

"The unemployment claims are consistent with continued solid job creation and a reduction in labour market slack over time," John Ryding, chief economist at RDQ Economics in New York, told Reuters.

ADP's private payrolls report, released Wednesday, showed US companies added a lower-than-expected 185,000 workers in July, the smallest increase since April.
Friday's government jobs data is expected to show US employers added 225,000 jobs last month, while the jobless rate held at 5.3 percent.

In Europe, the Stoxx 600 Index finished the day with a 0.8 percent slide from the previous close, as shares of commodity producers dragged the index lower. The UK's FTSE 100 Index slipped 0.1 percent, as did France's CAC 40 Index, while Germany's DAX Index fell 0.4 percent.