US stocks fall as media equities dive

NEW YORK (AFP) - A major sell-off in media equities following disappointing earnings reports from Viacom and 21st Century Fox pushed US stocks lower Thursday, with the biggest hit taken by the Nasdaq.

The tech-rich Nasdaq Composite Index slid 83.50 points (1.62 per cent) to 5,056.44.

The Dow Jones Industrial Average dropped 120.72 (0.69 per cent) to 17,419.75, while the broad-based S&P 500 shed 16.28 (0.78 per cent) at 2,083.56.

Viacom, which owns Nickelodeon and Comedy Central, plunged 13.4 per cent as third-quarter revenues dropped 10.6 per cent to US$3.06 billion (S$4.2 billion), below the US$3.29 billion analyst estimate.

Fox fell 6.4 per cent after reporting that earnings for the quarter ending June 30 sank 91 per cent to US$87 million.

The weak media results exacerbated worries that increased viewing on smartphones and other gadgets will hammer the cable business.

Disney fell 1.8 per cent and Time Warner dropped 0.8 per cent, adding to big declines Wednesday following their earnings reports.

"The destruction in the media space the last two days has been very unnerving," said Michael James, managing director of equity trading at Wedbush Securities.

James said investors were also cautious ahead of Friday's US jobs report for July, which has the potential to cause more volatility.

Tesla Motors tumbled 8.9 per cent as it reported a second-quarter loss of US$184 million and forecast deliveries of 50,000-55,000 electric cars in 2015, down a bit from the previous projection of 55,000 deliveries.

Keurig Green Mountain coffee company plummeted 29.8 per cent after reporting that third-quarter sales fell 5.2 per cent to US$969.6 million. The company said it would cut 5 per cent of its workforce.

Petroleum-linked stocks, which have underperformed the broader market in 2015, had a generally good day. Dow members ExxonMobil and Chevron rose 1.2 per cent and 1.4 per cent, respectively, and Anadarko Petroleum advanced 2.9 per cent.

Food giant Mondelez International gained 1.1 per cent as activist fund Pershing Square Holdings said it had amassed a 7.5 per cent stake in the maker of Oreo Cookies. Pershing said in a filing that it would engage Mondelez officials on strategic plans, including potential mergers and divestitures.

Solar company SunEdison sank 25.3 per cent as it reported a second-quarter loss of US$263 million, or 93 cents per share, much worse than the 55-cent loss projected by analysts.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.22 per cent from 2.27 per cent Wednesday, while the 30-year dipped to 2.89 per cent from 2.94 per cent. Bond prices and yields move inversely.