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US: Stocks mostly lower, media shares tumble
[NEW YORK] Media shares stumbled on Wednesday on worries about weak advertising revenues as US stocks finished mostly lower after the Federal Reserve left interest rates unchanged, as expected.
Media shares were in retreat, with Disney losing 2.4 per cent, Twenty-First Century Fox 5.1 per cent and Viacom 7.3 per cent. All three report earnings in the coming days.
The Fed, meanwhile, made no change in the benchmark interest rate and downplayed recent weak economic growth, a signal it likely will remain on course for gradual rate hikes this year.
Among other economic data, growth in the services sector accelerated in April, while private payrolls company ADP said the US economy added 177,000 private jobs, slightly better than expected.
The Dow Jones Industrial Average rose slightly to close the session at 20,957.90.
The broad-based S&P 500 shed 0.1 per cent to end at 2,388.13, while the tech-rich Nasdaq Composite Index fell 0.4 per cent to 6,072.55, pulling back from a record.
The selloff in media equities followed results from Time Warner that were generally strong, but included disappointing advertising revenue at its Turner broadcasting division.
Analysts worry that the growth of streaming services is hitting broadcasting profits.
"There's always the fear that it could be issues like cord-cutting," said Tuna Amobi, a media and entertainment analyst at CFRA. "It seems like there's a little bit of trepidation out there." Time Warner finished down 0.3 per cent.
Apple shed 0.3 per cent after reporting a 4.9 per cent rise in second-quarter profit to US$11 billion. But iPhone sales came in slightly lower than in the year-ago period.
Mondelez jumped 3.0 per cent after reporting a 13.6 per cent increase in first-quarter earnings to US$633 million. Cost-cutting helped the food company weather shaky demand in key markets.
Anadarko Petroleum plunged 7.7 per cent on worries about the impact of an April accident in Colorado in which two people were killed. An investigation by local fire officials said the cause of the accident was gas from an abandoned well. Anadarko has shut some drilling operations in Colorado near the site.