Market Snapshot: Dow futures fall 100 points as Caterpillar, Boeing results disappoint with Microsoft on deck

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U.S. stock-index futures added to modest declines Wednesday morning after a weaker-than-expected report from two Dow components and a poor update from a semiconductor company cast a cloud over the sector, with a fresh wave of corporate results ahead.

Wall Street is also watching developments pegged to Brexit, as a vote for a fast-track exit for Britain from the EU was rejected by parliament on Tuesday, but the delay eases concerns about the U.K. crashing out of the EU without a deal on October 31.

How are major indexes faring?

Futures for the Dow Jones Industrial Average YMZ19, -0.17% were down 126 points, or 0.5%, at 26,634, those for the S&P 500 index ESZ19, -0.19% were off 8.50 points, or 0.3%, at 2,986, while Nasdaq-100 futures NQZ19, -0.14% declined 17 points at 7,842, a fall of 0.2%.

On Tuesday, the Dow DJIA, -0.15% lost 39.54 points, or 0.15%, to 26,788.10, the S&P 500 index SPX, -0.36% fell 10.73 points, or 0.36%, to 2,995.99, while the Nasdaq Composite Index COMP, -0.72% shed 58.69 points, or 0.72%, to 8,104.30.

What’s driving the market?

Results from Caterpillar Inc. CAT, +1.10% and Boeing Co. BA, +1.79%   knocked the market lower in premarket action on Wednesday, with investors already unsettled from results on Brexit and weakness among chip companies.

Caterpillar cut its full-year 2019 earnings outlook as it reported third-quarter results that also missed Wall Street’s consensus estimates. Boeing earnings also missed estimates and deliveries of new planes fell short, but revenues beat forecasts. The manufacturer said it expects the beleaguered 737 Max to return to service in the fourth quarter.

The slide for equities also came amid a slide for the semiconductor sector following a poor forecast from Texas Instruments Inc. TXN, -1.80% that was much worse than expected in a late-Tuesday earnings report, with new revenue estimate range that fell as much as a half-billion dollars below Wall Street’s consensus revenue estimate.

See also: Texas Instruments tanks the chip sector and investors’ hopes for a rebound

Overall, however, earnings from American companies have been better than feared, albeit off lowered expectations. Thus far, of the 98 companies that have reported third-quarter results in the S&P 500, 82.7% have delivered results above analyst expectations, while 12.2% reported below analyst expectations, according to research provider Refinitiv. By comparison, 65% tend to “beat” estimates, and 20% fall below consensus estimates, according to Refinitiv data going back to 1994.

Meanwhile, Parliament’s rejection of Prime Minister Boris Johnson’s legislative schedule for Brexit reduced the likelihood of a departure by Oct. 31, and raised some doubts about an orderly exit from the European trade bloc, market participants said.

The U.K. government has already asked for an extension to the end of January 2020, and European Council President Donald Tusk said on Twitter that he would recommend that request is granted.

British lawmakers backed Boris Johnson’s new deal on Brexit, a big victory for the prime minister, but voted against his plan to railroad it through Parliament in three days. That means Britain is very unlikely to leave the European Union by October 31st as Mr Johnson had promised it would. European leaders have signalled they would grant an extension to that deadline.

Looking ahead, investors are watching for a report on U.S. housing, with the Federal Housing Finance Agency’s house price index for August due at 9 a.m. Eastern Time.

Which stocks are in focus?

Texas Instruments TXN, -1.80%  reported earnings per share of $1.40, excluding certain items, versus the $1.42 analyst consensus and gave a forecast that was much worse than expected late Tuesday.

Nike Inc. NKE, -0.64%  shares were little changed after the sports apparel company late Tuesday reported that longtime CEO Mark Parker was stepping down, effective January of next year. He will be replaced by John Donahoe.

Anthem Inc. ANTM, +2.84%  reported a 23% increase in third-quarter net income to $1.18 billion, or $4.55 a share, as revenue rose 15% to $26.44 billion after increasing medical enrollment by 1.1 million and increasing premiums. Adjusted for items, Anthem said it would’ve earned $4.87 a share.

Shares of Facebook Inc. FB, -3.91%  will be in focus as CEO Mark Zuckerberg will testify on the social-media giant’s effort to launch controversial digital-currency platform Libra. Facebook’s stock was down 1.9% in premarket trade Wednesday.

Hilton Worldwide Holdings Inc. HLT, -1.80% revised its financial targets for the year on Wednesday. The McLean, Va.-based company said it now expects systemwide revenue per available room, or RevPAR, to increase about 1% on a currency neutral basis compared with 2018. The company had previously forecast an increase between 1% and 2%. Shares were edging 0.6% lower before the bell on Wednesday.

Waste Management Inc. WM, -0.30% said Wednesday it had net income of $495 million, or $1.16 a share, in the third quarter, down from $499 million, or $1.16 a share, in the year-earlier period. Shares of the company fell 1.6% in the premarket.

Chipotle Mexican Grill Inc. shares CMG, -2.40% were down 1.6% before the bell after the fast-Mexican company on Tuesday reported third-quarter net income of $98.6 million, or $3.47 a share, compared with $38.2 million, or $1.36 a share, in the year-ago period. Adjusted for items such as restaurant asset impairment expense and restructuring, among other things, earnings were $3.82 a share.

How are other markets performing?

The 10-year Treasury note yield TMUBMUSD10Y, -1.68%  fell to 1.738% on Wednesday from 1.768% late Tuesday in New York. Mixed corporate has investors favoring bonds as they wait out the results still due this week, from Ford and Daimler to Microsoft and Boeing. In Europe, eyes are on Brussels, where an EU agreement to delay Brexit may lead to U.K. Prime Minister Boris Johnson seeking an early election.

West Texas Intermediate crude for November delivery CLX19, +1.69%  shed 52 cents, or 1%, to $53.96 a barrel on the New York Mercantile Exchange, after gaining 1.6%, a day ago. Crude oil resumed its decline as U.S. inventories expanded for a sixth week, the longest run of gains in almost a year.

Gold gained for a second day. Gold for December delivery on Comex GCZ19, +0.51%  gained $8.30, or 0.6%, to trade at $1,495.70 an ounce, after trading little changed on Tuesday.

The ICE U.S. Dollar Index DXY, +0.04%, which tracks the performance of the greenback against six major rivals, rose about 0.1% to 97.596.

Elsewhere, the Stoxx Europe 600 SXXP, -0.27%  was trading down 0.3% at 393.51. In Asia, China’s CSI 300 index 000300, -0.64%  finished off 0.6% at 3,871.08 and the Shanghai Composite Index SHCOMP, -0.43% slipped 0.4% to 2,941.62, while Hong Kong’s Hang Seng Index HSI, -0.82%  fell 0.8% to reach 26,566.73. Japan’s Nikkei 225 NIK, +0.34% gained 0.3% to 22,625.38.

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