Closing Market Summary: Stocks Slide Amid Continued Weakness in Media Names
The stock market endured a broad-based retreat on Thursday that was paced by the Nasdaq Composite. The tech-heavy index lost 1.6% while the Dow Jones Industrial Average and S&P 500 surrendered 0.7% and 0.8%, respectively, ahead of Friday's Nonfarm Payrolls report for July.
Equities opened just above their flat lines, but the S&P 500 dipped into the red and slid below its 100-day moving average (2,098) during the opening hour. Eight of ten sectors settled in the red with the consumer discretionary space (-1.3%) showing notable weakness for the second day in a row.
Specifically, media names weighed on discretionary shares once again with Viacom (VIAB 44.10, -7.31) tumbling 14.2% after reporting in-line results on light revenue. Similarly, Viacom's peer 21st Century Fox (FOXA 29.87, -2.05) sank 6.4% despite reporting a bottom-line beat while Disney (DIS 108.55, -1.98) lost 1.8% after plunging 9.2% yesterday.
The battered industry group was able to climb off its low ahead of the close, but losses in other influential areas kept the market pressured into the afternoon.
Elsewhere among cyclical sectors, technology (-1.0%) also settled behind the broader market amid notable weakness in high-beta chipmaker names. SunEdison (SUNE 17.08, -5.79) dove 25.3% after missing earnings estimates while the PHLX Semiconductor Index lost 1.8% with all but three components ending in the red.
In other earnings of note, Tesla (TSLA 246.13, -24.00) tumbled 8.9% after lowered delivery guidance overshadowed better than expected results for the past quarter. Tesla's loss contributed to the underperformance in the Nasdaq, but the index also had to contend with notable weakness in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 370.08, -16.64) slumped 4.3% while the broader health care sector (-2.1%) ended behind the remaining nine groups.
On the upside, energy (+1.6%) and utilities (+0.5%) settled in the green with the energy sector overcoming a 1.0% decline in crude oil, which settled at $44.66/bbl. As for utilities, the rate-sensitive sector benefited from lower rates as Treasuries ended on their highs with the 10-yr yield lower by five basis points at 2.22%.
Today's participation was ahead of recent averages with more than 930 million shares changing hands at the NYSE floor.
Economic data was limited to weekly Initial Claims, which increased to 270,000 from an unrevised 267,000 while the consensus expected a reading of 271,000. Since reaching a 40-year low (255,000) two weeks ago, the initial claims level has slowly inched back into the bottom of its previous 270,000 - 290,000 range. These are levels that support the theory that the labor market has returned to full employment.
Tomorrow, the Nonfarm Payrolls report for July (consensus 229K) will be released at 8:30 ET while June Consumer Credit (expected $17.00 billion) will be reported at 15:00 ET.
- Nasdaq Composite +6.8% YTD
- S&P 500 +1.2% YTD
- Russell 2000 +0.9% YTD
- Dow Jones Industrial Average -2.3% YTD