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Oct 23, 2019

US Markets | Futures Indications Update: Stock futures drop after Caterpillar falls on weak earnings

Fred Imbert, Sam Meredith



U.S. stock futures fell on Wednesday after global economic bellwether Caterpillar reported earnings that badly missed analyst expectations.
Dow Jones Industrial Average traded down 54 points, indicating a loss of about 34 points at the open. Futures on the S&P 500 and Nasdaq 100 also declined.
Caterpillar shares fell 1.9% after the company said it earned $2.66 per share in the third quarter, versus the Refinitiv consensus estimate of $2.88 per share. Revenue came in at $12.758 billion, while Wall Street expected revenue of $13.572 billion. The heavy machinery manufacturer lowered its full-year earnings per share forecast to a range of $10.59 and $11.09, lower than the expected $11.70.
Weak results from Texas Instruments also weighed on futures. Texas instruments — which is often seen as a proxy for the microchip industry — plunged more than 9% in the premarket after posting fourth-quarter guidance well below market estimates.
Those losses were offset slightly by a gain in Boeing shares. The aerospace giant rose 1% in volatile trading despite posting quarterly earnings that missed estimates by a wide margin. The company reported a profit of $1.45 per share. Analysts polled by Refinitiv expected a profit of $2.09.
Ford, Microsoft, and Tesla are among those scheduled to report their latest quarterly figures after market close.
Despite the weak results from Caterpillar and Texas Instruments, the third-quarter earnings season has largely topped analyst expectations. Of the 110 S&P 500 companies that have reported, 81% have posted better-than-expected results, according to FactSet.
In Europe, U.K. lawmakers voted in favor of Prime Minister Boris Johnson’s Brexit plan, but rejected his attempt to fast-track legislation to take the country out of the EU by the end of the month. The prime minister said the next step would be to wait for the EU to respond to a request to delay the current Brexit deadline of October 31.
On the data front, the Federal Housing Finance Agency will release its house price index for August at 9 a.m.

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