Big media firms lead stocks lower
Big media companies led the stock market lower Thursday as investors fretted over fading revenue from cable television. Viacom and 21st Century Fox were among the hardest hit.
Walt Disney and other media giants sank amid signs that more people are canceling their cable TV. Viacom, the company behind Comedy Central and Nickelodeon, reported Thursday that its sales and profit fell in the most recent quarter. 21st Century Fox, which owns MTV, also reported a drop in television revenue. Viacom’s stock plunged 14% and 21st Century Fox lost 6%.
“You don’t usually see media names move like this,” said Rob Eschweiler, a global investment specialist at J.P. Morgan Private Bank in Houston.
The Standard & Poor’s 500 index fell 16.28 points, or 0.8%, to 2,083.56, and the Nasdaq composite lost 83.50 points, or 1.6%, to 5,056.44. The Dow Jones industrial average slid 120.72 points, or 0.7%, to 17,419.75, the sixth day in a row that the Dow has finished with a loss.
Over the last month, the market has been making gains one week and losing them all the next. “We’ve been moving nowhere fast,” said Terry Sandven, senior equity strategist at U.S. Bank Wealth Management in Minneapolis. “The market just lacks any direction.”
Sandven said he thinks that things will change once investors get a clear picture of how quickly the Federal Reserve will raise interest rates for the first time in more than nine years. He’s hoping the Fed will make its first move in September.
“It will mean that the Fed thinks the economy is strong enough to handle something other than crisis-level rates,” Sandven said.
Keurig Green Mountain plummeted 30%, the biggest drop in the S&P 500, after reporting falling sales of its packaged coffee and brewing products. The company said it plans to lay off 5% of its workforce in a bid to cut costs. Its stock dropped $22.31, to $52.67.
Major markets in Europe had slight losses. Germany’s DAX lost 0.4%, while both France’s CAC 40 and Britain’s FTSE 100 slipped 0.1%.
In Asia, Japan’s benchmark Nikkei 225 rose 0.2% and South Korea’s Kospi lost 0.8%. Hong Kong ’s Hang Seng dropped 0.6% and the Shanghai composite fell 0.9%.
Back in the U.S., government bond prices rose, pushing down the yield on the 10-year Treasury note to 2.22% from 2.27% late Wednesday.
The price of oil fell near its low for the year as a Goldman Sachs report predicting that oil prices would be “lower for longer” reinforced concerns that have driven oil lower over the last six weeks. U.S. crude fell 49 cents to $44.66 a barrel in New York.