Wall St. falls as media stocks slump; jobs data awaited

(Reuters) - U.S. stocks fell on Thursday as a spate of poor earnings reports from media companies added to investors' nervousness ahead of a key jobs data that could provide clues regarding the timing of a rate hike.

Walt Disney's shares fell 4.2 percent to $105.90, a day after their largest daily drop in almost seven years. The stock was also the biggest drag on the Dow and the S&P 500.

Disney lowered profit guidance for its cable networks unit on Tuesday, while Viacom Inc reported lower-than-expected quarterly revenue hurt by weakness in its cable TV business.

Viacom fell 22 percent to $39.57, their lowest in almost four years. Twenty-First Century Fox fell 12.3 percent, while Time Warner , Comcast and CBS were all in the red.

In other earnings-driven stock moves, Tesla and Keurig Green Mountain skidded after reporting disappointing numbers.

Michael Kors was among the few bright spots on a gloomy day, rising 12.1 percent to $44.25 after its results beat expectations.

Even as earnings directed Wall Street's moves on Thursday, investors were jittery ahead of non-farm payroll numbers that are expected to have risen by 223,000 in July - on par with June.

Economic data released in the last few days have been largely mixed, prompting some investors to argue that the Fed might hold off a rate hike until December.

The Fed has said it will raise rates only when it sees a sustained recovery in the economy. A hike in rates, which have stayed near zero for nearly a decade, will increase borrowing costs for companies, crimping profits.

"While September looks likely, it's the pace of the tightening that's more important rather than the timing of the hike," said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas in New York.

At 11:42 a.m. ET (1542 GMT) the Dow Jones industrial average <.DJI> was down 122.7 points, or 0.7 percent, at 17,417.77, the S&P 500 <.SPX> was down 18.03 points, or 0.86 percent, at 2,081.81 and the Nasdaq Composite <.IXIC> was down 86.27 points, or 1.68 percent, at 5,053.68.

Nine of the 10 major S&P sectors were lower with the consumer discretionary index's <.SPLRCD> 2.13 percent fall leading the decliners. The index includes media stocks.

In more earnings action, Marathon Oil , Monster Beverage and Zynga report after the close of market.

With about three-quarters of the S&P 500 companies having reported, second-quarter earnings are estimated to have increased 1.3 percent while revenues are projected to have fallen 3.5 percent.

However, valuations look stretched. The S&P 500 is trading at a 25 percent premium to its historical median price-to-sales ratio, Jack Ablin, chief investment officer at BMO Private Bank said in a note to clients.

"The Federal Reserve will soon withdraw its unwavering liquidity, leaving the bulls to rely on technical indicators

such the 200 day moving average, above which the S&P 500 is trading."

Tesla Motors fell 9.4 percent to $244.61 after the electric car maker posted a wider quarterly loss.

Keurig Green Mountain slumped as much as 30.1 percent to a two-year low of $52.40, a day after the company lowered its annual sales and earnings-per-share forecasts.

Declining issues outnumbered advancing ones on the NYSE by 2,022 to 913. On the Nasdaq, 1,891 issues fell and 769 advanced.

The S&P 500 index showed 15 new 52-week highs and 42 new lows, while the Nasdaq recorded 52 new highs and 134 new lows.

(Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)

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