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Dow gets rid of disappointing results from Caterpillar, Boeing and rises higher



Stocks rose higher Wednesday morning, despite the weaker-than-expected report of two Dow components and a poor update from a semiconductor company, with a new wave of corporate performance on deck.

Wall Street has also been watching the developments surrounding Brexit since a UK exit ballot for Britain was rejected by parliament on Tuesday, but the delay has eased fears that Britain will get out of the bloc without a deal. on October 31st.

How are the main indices developing?

The Dow Jones Industrial Intermediate

DJIA, + 0.25%

rose 45 points, or 0.2%, to 26 832, while the S&P 500 index

SPX, + 0.14%

was taken less than a point at 2.997, a gain less than 0.1%. The Nasdaq Composite Index

COMP, + 0.08% ,

meanwhile, slid about 9 points. or 0.1% to reach 8 094.

On Tuesday, the Dow lost 39.54 points, or 0.2%, to 26 788.10, the S&P 500 index fell 10.73 points, or 0.4 % to 2,995.99, while the Nasdaq weakened by 58.69 points, or 0.7%, to 8,104.30.

What leads to the market?

Results from Caterpillar Inc .

CAT, -0.28%

and Boeing Co.

BA, + 2.60%

initially plunged the market lower in pre-sales on Wednesday, with investors already unsettled by Brexit developments and weakness among chip companies. But stocks rose in early trading as investors pulled back positive quarterly results from blue chip components.

Caterpillar lowered its full year earnings forecasts as it reported third quarter results that also missed Wall Street's consensus estimates.

This happened against the backdrop of a slide for the semiconductor sector after a poor forecast by Texas Instruments Inc .

TXN, -6.39%

                            
                                  
      
      
      
      
      
      
      
                                        which was far worse than expected in a short Tuesday earnings report, with a new range of revenue forecasts that fell by half a billion dollars below the Wall Street consensus estimate.

See also : Texas Instruments reserves the chip sector and investors' hopes for recovery

Overall, however, profits from US companies have been better than they feared, albeit with lower expectations. So far, of the 98 companies that reported third-quarter results in the S&P 500, 82.7% were above analysts 'expectations, while 12.2% were below analysts' expectations, according to research provider Refinitiv. By comparison, 65% tend to "beat" estimates, and 20% fall in consensus, according to Refinitiv data dating back to 1994.

Meanwhile, Parliament's rejection of Prime Minister Boris Johnson's legislative timetable for Brexit reduces the likelihood of departure to 31 October or exit without a deal from the EU. The UK government has already requested an extension by the end of January 2020, and European Council President Donald Tusk said on Twitter that he would recommend the request be granted.

On a bright day for US economic data, the Federal Residential Agency's housing price index for August was 0.2% higher for the month, leading to an annual price increase of 4.6%.

For investors this week is about profits, even with a critical meeting of the Federal Reserve that will start in less than a week, said Kate Warne, chief investment strategist with Edward Jones. "These are not just results," she said, "but forecasts and comments."

For example, Boeing's profits also missed estimates, and shipments of new aircraft were short, but revenues exceeded forecasts. However, the manufacturer said it expects the 737 MAX to return to service in the fourth quarter.

"Investors were more concerned about slowing down growth, which is reasonable, but I think there is an overdose of pessimism about how sustainable consumers are," Warne said. She pointed out that Q3's profits were a tough year-over-year comparison as corporations pushed for tax cuts at the end of 2017 last year. From this point of view, the results, which are slightly better than expected, are solid, said the strategist.

"In an environment of job growth, ultra-low interest rates and stimulating the central bank, this is actually a good environment and one where you have to invest in stocks because they can continue to increase," she said .

Which stocks are in focus?

Caterpillar

CAT, -0,28%

lowered its full-year earnings forecasts in 2019 as it reported third-quarter results that also missed Wall Street consensus estimates. Shares were down 1.8%.

Texas Instruments

TXN, -6.39%

shares collapsed more than 7% after reporting earnings per share of $ 1.40, excluding certain positions against the analyst consensus of $ 1.42 and gave a forecast that was much worse than expected Tuesday.

Nike Inc .

NKE, -2.20%

stock declined 2.4% after sportswear company late Tuesday announced that longtime CEO Mark Parker had retired as of January next year. He will be replaced by John Donahoe.

Anthem Inc. .

ANTM, + 2.67%

reported a 23% increase in third quarter net income to $ 1.18 billion, or $ 4.55 per share, as revenue increased by 15% to 26 , $ 44 billion after a $ 1.1 million increase in medical records and premiums. Adjusted for items, Anthem said it would earn $ 4.87 a share. The shares of the health care company increased by 4.1%.

Shares in Facebook Inc .

FB, + 1.58%

will be in focus, as CEO Mark Zuckerberg will testify to the social media giant's efforts to launch a controversial digital currency platform Libra. Facebook's stock rose 0.9%.

Hilton Worldwide Holdings Inc .

HLT, + 2,13%

revised its financial targets for the year on Wednesday. The McLean, Va., Based company said it now expects revenue from the entire available room system or RevPAR to grow by about 1% based on a neutral currency compared to 2018. The company has previously projected an increase of between 1% and 2 %. Shares were 1.1% higher on Wednesday.

Waste Management Inc. .

WM, -2.04%

said on Wednesday it had a net income of $ 495 million, or $ 1.16 per share, in the third quarter, down from $ 499 million, or 1. $ 16 a share, in the previous period, the company's shares fell 1.5%.

Chipotle Mexican Grill Inc . shares

CMG, -5.24%

declined nearly 5% after the fast Mexican company reported net income for the third quarter of $ 98.6 million, or $ 3.47. a share, up from $ 38.2 million, or $ 1.36 a share, from a year ago. Adjusted for items such as impairment charges on restaurant assets and restructuring, among other things, the gain was $ 3.82 per share.

After the market closed on Wednesday, EBay Inc .

EBAY, + 0.26% ,

Microsoft Corp .

MSFT, -0.31% ,

Ford Motor Co. .

F, -0.61% ,

and Tesla Inc. .

TSLA, -0.60% .

are due to the results of the report.

How are the other markets performing?

10-year Treasury yield

TMUBMUSD10Y, -1.04%

fell to 1.738% on Wednesday from 1.768% Tuesday in New York. The mixed corporate outlook is for investors who prefer bonds as they wait for the results, which are due this week. In Europe, our eyes are on Brussels, where the EU's Brexit agreement could lead to Prime Minister Boris Johnson seeking early elections.

Intermediate West West Texas for delivery in November

CLX19, + 1.69%

threw 51 cents, or 1%, to $ 53.96 a barrel on the New York Stock Exchange after gaining 1.6% a day ago. Crude oil has resumed its decline after US stocks expanded for a sixth week, the longest profit period of nearly a year.

Gold won for the second day. Gold for December delivery by Comex

GCZ19, + 0.67%

earned $ 7.60, or 0.5%, to trade at $ 1495.00 an ounce, after trading was little changed on Tuesday.

ICE US Dollar Index

DXY, + 0.06% ,

, which tracks the performance of the Green Rowers against six major rivals, rose by less than 0.1% to 97.56.

Elsewhere, Stoxx Europe 600

SXXP, -0.01%

traded 0.1% at 394.5. In Asia, the Chinese CSI 300 Index

000300, -0.64%

finished 0.6% at 3 871.08 and the Shanghai Composite Index

SHCOMP, -0.43%

slipped 0.4% to 2 941.62 while Hong Kong Hang Seng Index

HSI, -0.82%

fell 0.8% to reach 26 566.73. The Japanese Nikkei 225

NIK, + 0.34%

accumulated 0.3% to 22 625.38.


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