U.S. Futures Drop as Caterpillar, Texas Instruments Disappoint
October 23 2019 - 8:26AM
Dow Jones News
By Caitlin Ostroff
U.S. stock futures and European equities drifted lower Wednesday
as investors grappled with extended uncertainty on Brexit and took
stock of U.S. corporate earnings.
Futures tied to the Dow Jones Industrial Average fell 0.4% as
behemoth companies including Blackstone Group and Boeing reported
third-quarter earnings early in the day. Changes in futures don't
necessarily predict moves after the opening bell.
Texas Instruments dropped 11.5% in off-hours trading on
disappointing third-quarter results, and weighed on stocks of chip
makers globally. STMicroelectronics dropped 1.5% in Europe, while
Japan's Renesas Electronics fell 5.3% and South Korea's SK Hynix
slumped 1.8%.
Shares of Caterpillar tumbled 4% in premarket trading after it
slashed its full-year outlook. The construction-equipment maker
said it expects demand to stay flat due to global economic
uncertainty.
Thermo Fisher Scientific rallied over 3% after the lab-equipment
company raised the lower end of its revenue guidance for the
year.
Meanwhile, the Stoxx Europe 600 index ticked down 0.3%, while
the U.K.'s FTSE 250 fell 0.2%, after British lawmakers endorsed the
terms of a Brexit agreement but rejected the government's proposed
timetable. The pound, which had fallen sharply after Tuesday's
votes, edged down 0.1%.
Parliament's rejection of Prime Minister Boris Johnson's
legislative schedule for Brexit reduced the likelihood of a
departure by Oct. 31, said Michael Hewson, chief market analyst at
CMC Markets. Mr. Johnson said Tuesday he would try to trigger an
election if lawmakers move too slowly in considering his deal.
"There are a lot of moving parts," which makes it hard for
investors to position for what happens next, Mr. Hewson said. "We
are now in extension territory and we've been in that territory for
a while."
As investors flocked to haven assets, eurozone government bond
yields edged lower while the Japanese yen ticked higher and gold
prices rose.
The German 10-year bund yield dropped to minus 0.411%, from
minus 0.365% on Tuesday. The rate on 10-year U.K. gilts fell to
0.662% from 0.715% Tuesday afternoon. Gold rose 0.6%, while the yen
traded 0.1% higher against the U.S. dollar.
In Europe, shares of Swedbank AB fell 5.9% after the bank posted
a bigger-than-expected drop in third-quarter profit, citing a
competitive environment.
In Hong Kong, the Hang Seng Index fell 0.8% amid reports that
China is preparing to replace the city's leader, Carrie Lam.
Brent crude oil slid 0.8% to $59.25 a barrel after recent data
signaled a buildup in inventories of crude. Figures to be released
by the U.S. Energy Information Administration on Wednesday could
put additional pressure on prices if inventories are high,
according to ING.
More third-quarter earnings are due later in the day, with
heavyweights like Microsoft, Ford Motor and Tesla set to
report.
--David Hodari contributed to this article.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
October 23, 2019 08:11 ET (12:11 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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