NEW YORK (Reuters) - U.S. stocks edged lower on Thursday, pausing after recent gains, after AT&T said it lost subscribers in the last quarter, while banks fell following results.
JPMorgan Chase (JPM.N) and Citibank (C.N) managed to beat profit and revenue estimates despite reporting a drop in trading revenue, but JPMorgan fell about 0.9 percent, while Citigroup dropped 3.1 percent.
Bank of America (BAC.N) and Wells Fargo (WFC.N), scheduled to report on Friday, were also lower, dragging the financials index .SPSY down 0.7 percent.
“The first bank results were OK, but I guess people might be wondering about reported and continued sluggishness in loan growth and a little bit of an uptick in credit quality concerns. Over the next few days we’ll get many more reports and more material for people to study,” said John Carey, portfolio manager at Pioneer Investment Management in Boston.
The Dow Jones Industrial Average .DJI fell 31.87 points, or 0.14 percent, to 22,841.02, the S&P 500 .SPX lost 3.4 points, or 0.13 percent, to 2,551.84 and the Nasdaq Composite .IXIC dropped 7.11 points, or 0.11 percent, to 6,596.44.
AT&T (T.N) tumbled 5.7 percent after the No. 2 U.S. wireless carrier said it lost 90,000 U.S. video subscribers in the third quarter due to intense competition and the impact of recent hurricanes.
Related stocks also fell, including Comcast (CMCSA.O), down 4.3 percent. Viacom (VIAB.O) sank 2.6 percent after warning that Charter Communications (CHTR.O) subscribers may lose access to its channels as the expiration looms for a distribution deal. Charter fell 2.1 percent.
With the S&P 500 up about 14 percent in 2017, investors are hoping earnings growth can help justify valuations. Analysts expect S&P 500 earnings grew 4.4 percent in the third quarter, according to Thomson Reuters data. S&P 500 companies posted double-digit profit gains in both the first and second quarters.
“People got a little bit spoiled by the very nice advances we saw in the first and second quarter, but keep in mind that earnings started perking up in the third quarter of last year so the year-over-year comparisons might not look as robust,” Carey said.
That, along with brokerage Guggenheim raising concerns over subscriber losses at Disney and Viacom, sent fresh jitters across a sector hit a day earlier by President Donald Trump’s suggestion to challenge TV network licenses over ‘fake news’.
The three indexes managed to eke out new intraday highs early in the session on gains in technology and industrial stocks.
Advancing issues outnumbered declining ones on the NYSE by a 1.22-to-1 ratio; on Nasdaq, a 1.10-to-1 ratio favored decliners.
Additional reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and James Dalgleish