Market Extra: Stock-market traders fixated on what ‘unprecedented’ Discovery, ViacomCBS selloff means for Wall Street

Media stocks were hammered on Friday, with shares of ViacomCBS and Discovery part of what Bloomberg News reported as an “unprecedented” $35 billion in block trades, that included Chinese companies as well as the U.S. media conglomerates.

Both shares ended the week down more than 27%, capping a period that saw ViacomCBS’s Class B shares VIAC, -27.31% finishing at their lowest level since Jan. 25 and booking its steepest daily percentage drop in its history.

Discovery shares DISCA, -27.45%, meanwhile, posted their sharpest one-day drop since Sept. 18, 2008, falling to their lowest close since Feb. 4 and producing the second-worst performance among S&P 500 stocks, with the second-most activity of any member of the broad-market benchmark.

A Sunday report by Bloomberg News, citing people familiar with the matter, pointed to Archegos Capital Management LLC — the family office of trader Bill Hwang — as an institution that sold a major block of Viacom and Discovery as well as dumping shares of Chinese technology companies and other U.S. media conglomerates.

It is unclear what the big sales will ultimately mean for Monday’s open in the U.S., but market participants were eagerly awaiting.

“While the speed of the fall has attracted attention for all of the wrong reasons, prompting speculation of a large margin-call liquidation, what most people appear to have missed is that both of these companies have seen their share prices almost quadruple since October last year,” wrote Michael Hewson, chief market analyst at CMC Markets, in a Sunday note.

The Dow Jones Industrial Average DJIA, +1.39% closed up 453.40 points, or 1.4%, on Friday, the S&P 500 index SPX, +1.66% finished 65.02 points, or 1.7%, higher to settle at 3,974.54, while the Nasdaq Composite Index COMP, +1.24% rose 161.05 points, or 1.2%, to finish at 13,138.72.