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Big media stocks are bad news for Wall Street

NEW YORK - Major media companies led the stock market lower Thursday as investors fretted over fading revenue from cable TV. Viacom (VIAB) and 21st Century Fox (FOXA) were among the hardest hit.

The primary indexes headed higher in the first few minutes of trading before pulling a quick U-turn. The selling gained momentum until the afternoon, when the indexes recovered some of their losses.

The Standard & Poor's 500 index fell 16.28 points, or 0.8 percent, to close at 2,083.56, and the Nasdaq composite lost 83.50, or 1.6 percent, finishing at 5,056.44. The Dow Jones industrial average lost 120.72, or 0.7 percent, to end at 17,419.75, the sixth day in a row the Dow has wound up with a loss.

Walt Disney (DIS) and other media giants sank following 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 percent, and 21st Century Fox lost 6 percent.

"We're at the back end of earnings season and the broad market has been in a tight trading range," said Rob Eschweiler, a global investment specialist at J.P. Morgan Private Bank in Houston. "But under the surface, you're seeing some volatility among single stocks. You don't usually see media names move like this."

"We have a few big companies that are down a lot. Disney is weighing on the Dow, and Tesla (TSLA) and Google (GOOG) on the Nasdaq," Peter Cardillo, chief market economist at Rockwell Global Capital, told CBS MoneyWatch. "Individual companies have had valuation adjustments due to earnings. It's weighing on the whole market."

Keurig Green Mountain stocks take a hit

Over the past month, the market has been in the habit of 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 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.

Among other companies in the news, Keurig Green Mountain (GMCR) plummeted 30 percent, 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 percent of its workforce in a bid to cut costs. Its stock dropped $22.31 to $52.67.

With the bulk of big companies already handing in results, analysts project that second-quarter earnings at big U.S. companies edged up 0.2 percent, according to S&P Capital IQ. Though meager, it's much better than the 4 percent drop analysts had forecast a month ago.

Investors are looking ahead to the Labor Department's monthly jobs report on Friday. Economists forecast the government report will show employers added 225,000 jobs and the unemployment rate held at 5.3 percent for the second straight month. That level of job creation would buttress expectations that the Fed will lift its benchmark interest rate later this year.

"I think if the Fed doesn't move this year it's going to be a disappointment," Eschweiler said. "It would be a bit of a head scratcher: What do they know that we don't?"

Major markets in Europe ended with slight losses. Germany's DAX lost 0.4 percent, while both France's CAC 40 and Britain's FTSE 100 slipped 0.1 percent.

In Asia, Japan's benchmark Nikkei 225 inched up 0.2 percent, while South Korea's Kospi lost 0.8 percent. Hong Kong's Hang Seng fell 0.6 percent, and the Shanghai Composite fell 0.9 percent. Benchmarks in Taiwan, Indonesia, the Philippines and New Zealand also finished lower.

Back in the U.S., government bond prices rose, pushing the yield on the 10-year Treasury note down to 2.22 percent from 2.27 percent the day before.

In commodity trading, gold rose $4.50 to settle at $1,090.10 an ounce, and silver gained 12 cents to $14.68. Copper lost a penny to $2.34 a pound.

The price of oil fell near its low for the year as a Goldman Sachs (GS) report predicting that oil prices would be "lower for longer" reinforced concerns that have driven oil lower over the past six weeks. U.S. crude fell 49 cents to close at $44.66 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 7 cents to close at $49.52 in London.

In other futures trading on the NYMEX:

- Wholesale gasoline fell 2.3 cents to close at $1.648 a gallon.

- Heating oil rose 1.1 cents to close at $1.550 a gallon.

- Natural gas rose 1.5 cents to close at $2.813 per 1,000 cubic feet.