Wall Street drops as bank earnings fail to cheer, media stocks drag
(Reuters) - U.S. stocks fell on Thursday morning, dragged down by media companies, while results from JPMorgan and Citigroup failed to fuel the optimism that has driven indexes to record highs.
JPMorgan <JPM.N> and Citigroup <C.N>, which had already talked down third-quarter expectations, reported earnings that were better than Wall Street estimates even as trading revenues fell. The shares of both companies were little changed.
"After a long stretch of consecutive highs in the market, with earnings, even if they are slightly disappointing, or an even an aspect of earnings like bond trading at JPM, is more an excuse to selloff," said Scott Clemons, chief investment strategist for Brown Brothers Harriman in New York.
With the S&P 500 up about 14 percent in 2017, investors are betting on strong earnings growth across the S&P 500.
AT&T <T.N> tumbled 3.22 percent after the company said its third-quarter results took a hit from the string of hurricanes.
The company also said it lost video subscribers in the quarter. Brokerage Guggenheim downgraded Disney <DIS.N> and Viacom <VIAB.O> on worries over subscriber declines
That sparked fresh jitters in a sector that was hit a day earlier by President Donald Trump's suggestion to challenge TV network licenses over 'fake news'.
Comcast <CMCSA.O> fell 2.8 percent, Disney <DIS.N> fell 1 percent. Viacom sank 6.6 percent after warning that Charter Communications subscribers may lose access to its channels as the expiration looms for a distribution deal.
Clemons said earnings will probably heighten volatility, with lack of any other major developments to drive the market.
At 9:37 a.m. ET (1337 GMT), the Dow Jones Industrial Average <.DJI> was down 38.19 points, or 0.17 percent, at 22,834.7, the S&P 500 <.SPX> was down 4.38 points, or 0.17 percent, at 2,550.86 and the Nasdaq Composite <.IXIC> was down 7.33 points, or 0.11 percent, at 6,596.22.
Ten of the 11 major S&P indexes were lower, led by a more than 2 percent fall in the telecom services index <.SPLRCL> due to AT&T's declines.
The biggest drag, however, was from the consumer discretionary sector <.SPLRCD>, which fell 0.57 percent, weighed down by media stocks.
Energy stocks also fell, dragged down by a more than 1 percent drop in crude oil prices as U.S. fuel inventories rose despite efforts by OPEC to cut production.
General Motors <GM.N> fell 1.5 percent. The Wall Street Journal reported GM planned to cut production at a Detroit plant and lay off about 1,500 workers.
J.Jill <JILL.N> nearly halved to hit a record low of $4.96 after the women's fashion retailer slashed its third-quarter forecast.
Declining issues outnumbered advancers on the NYSE by 1,472 to 983. On the Nasdaq, 1,294 issues fell and 965 advanced.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza)
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