Thursday's early afternoon trade: rally pauses as tepid bank earnings, media stocks weigh

A rally on Wall Street paused on Thursday following lackluster quarterly earnings from J.P Morgan and Citigroup and as media stocks dropped for the second straight day. The two banks managed to beat profit and revenue estimates despite reporting a drop in trading revenue. J.P Morgan fell about 1 percent, while Citigroup dropped more than 2 percent.
Bank of America and Wells Fargo, scheduled to report on Friday, were also lower, dragging the financials index down 0.39 percent. "Not a huge reaction to earnings despite relatively healthy quarter out of the early reporters. The risk is similar to the second quarter in that stocks are being priced for perfection," said Bryan Reilly, senior investment analyst at CIBC Atlantic Trust.
"But the strength in the global economy has accelerated and a weakening dollar should set up companies for very healthy beats in Q3." With the S&P 500 up about 14 percent in 2017, investors are betting on strong earnings growth to sustain the valuation. AT&T tumbled more than 4 percent after the No. 2 US wireless carrier said it lost 90,000 US video subscribers in the third quarter due to intense competition and the impact of recent hurricanes.
That, along with a brokerage Guggenheim raising concerns over subscriber losses at Disney and Viacom, sent fresh jitters across a sector that was hit a day earlier by President Donald Trump's suggestion to challenge TV network licenses over 'fake news'.
At 12:36 am ET (1636 GMT), the Dow Jones Industrial Average was down 3.94 points, or 0.02 percent, at 22,868.95, the S&P 500 was down 1.79 points, or 0.07 percent, at 2,553.45. The Nasdaq Composite was up 4.16 points, or 0.06 percent, at 6,607.71.