Stock Futures Reverse Higher: Boeing Leads As Chip Stocks Slide

Stock futures climbed out of early losses and into narrow gains Wednesday, as positive earnings news from Boeing (BA) lifted the Dow and countered a sell-off among chip stocks.

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Chipmakers faced significant early pressure, after quarterly reports late Tuesday from Texas Instruments (TXN), Teradyne (TER) and MKS Instruments (MKSI), and an early report on Wednesday from STMicroelectronics (STM). Trivago (TRVG) and Boeing posted strong premarket advances after early earnings reports. Cannabis stocks were largely quiet, with the exception of Tuesday’s new issue Aurora Cannabis (ACB), which jumped 5% in premarket trade.

Dow futures shed early losses and climbed 0.5% above fair value, propped by Boeing, which powered nearly 3% higher after a solid third-quarter report. Nasdaq 100 and S&P 500 futures also climbed out of losses and into narrow gains.

Texas Instruments and ASML Holdings (ASML) held the worst declines among Nasdaq 100 issues. Texas Instruments and Edwards Lifesciences (EW) fell hardest among S&P 500 names.

Stock Futures: Boeing Leads Blue Chips, FANGs Mixed

FANG stocks and most of the 30 Dow Jones industrials were quietly mixed. Boeing was the blue chip standout, rumbling ahead 2.9% after reporting a broad third-quarter earnings and revenue beat, and raising its full-year earnings guidance to well above consensus targets.

Boeing had triggered an automatic sell rule Tuesday by pulling back more than 8% below a 374.32 buy point in a cup -with-handle base.

Chip Stocks Take Early Hits: STMicro, Texas Inst., MKS Dive

Chip stocks were taking an early beating, with STMicroelectronics carving a 14% loss after turning in a mixed third-quarter performance and guiding fourth-quarter revenue below consensus views. The chip sector is already seriously beaten down, but has been unable so far to establish a bottom to its correction. STMicro shares ended Tuesday down 42% from a June high.

Texas Instruments buckled 6.6% in early trade after reporting late Tuesday its earnings beat analysts’ third-quarter targets, but revenue came up short. The chipmaker also reported demand had slowed across most of its markets, and trimmed its guidance to reflect the change. The stock is down 15% from a June high.

Smaller chipmaker MKS Instruments has been in an even longer slide, down 43% from a March high. It also reported mixed results and soft guidance after Tuesday’s close. Shares were down 4.7% early Wednesday.

The mood spilled over onto other chip and chip equipment makers: ASML Holdings dropped 4.1%. NXP Semiconductors (NXPI) fell 2.4%.

The exception was Teradyne, which powered ahead 4.8% after reporting positive results late Tuesday.

China Mixed, Europe Rises; Oil Prices Steady Ahead of Data

China stock markets posted a mixed session on Wednesday. Major benchmarks across much of the rest of the world gained ground after steep losses on Tuesday. In Japan, Tokyo’s Nikkei 225 took a mild bounce, up 0.4%. India’s Sensex advanced 0.6%. Markets in Europe moved higher near midday. London’s FTSE 100 led, up 0.7%, while the CAC-40 in Paris climbed 0.6% and Frankfurt’s DAX added 0.3%.

Oil prices steadied after tumbling 4% on Tuesday. The American Petroleum Institute on Tuesday estimated weekly stockpiles had increased by 9.9 million barrels — 167% above forecasts. Official weekly numbers are due out at 10:30 a.m. ET from the Energy Information Administration. West Texas Intermediate rose 0.1% to $ 66.50 per barrel, but is still down almost 14% since Oct. 3 and at its lowest level since August.

The Federal Housing Finance Agency releases its August Housing Price Index at 9 a.m. ET. September new home sales numbers from the Commerce Department are slated for release at 10 a.m. ET.

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