US stocks kicked the day off mixed.
On a day with a relatively empty economic calendar, corporate earnings are the main driver for the market.
Caterpillar(CAT) andBoeing(BA), both heavily-weighted Dow components, reported before the bell. Although both companies posted disappointing outlooks, their stocks rose, because investors were relieved the news wasn’t worse.
- TheDowopened 0.1%, or 34 points, higher.
- TheS&P 500was flat.
- TheNasdaq Compositeopened 0.2% lower.
Boeing( (BA) ) is profitable again. But the 737 Max crisis is still a major problem for the company’s financial results.
The aircraft makerearned $ (million in the third quarter) , bouncing back from a $ 3.7 billion loss in the previous quarter. That loss was because of a $ 5 billion charge related to the grounding of the 737 Max in March.
Boeing’s most important plane was grounded after two fatal crashes that killed 346 people.
The stock is up 1% in premarket trading.
Amid the earnings bonanza, US stocks are poised to start the day slightly lower, adding on from Tuesday’s losses.
Futures for theDoware 0.1%, or 34 points, lower, andS&P 500futures were down 0.2%. Futures for theNasdaq Compositewere flat.
But with this many earnings releases today, the indexes could easily be dragged down further.On Mondayandlast week Friday, falling shares of troubledBoeing(BA) dragged down the Dow . Boeing reported today and could slide again in today’s trading. The stock is up 0.9% in premarket trading so far.
Caterpillar just revealed a trifecta of negative developments that underscore the economic pain caused by the trade war.
The world’s largest construction equipment maker posted asurprise decline in sales and earnings. And Caterpillar cut its outlook, warning that sales will be “modestly lower” in 2019.
The company, which is viewed as an economic bellwether, expects dealers to inventories during the fourth quarter because of “global economic uncertainty.”
The US-China trade war has exacerbated the economic slowdown going on around the world. Caterpillar said its sales declined in every geographic segment except Latin America. The biggest drop was in Asia-Pacific.
Caterpillar’s stock (CAT) dropped about 4%, potentially setting it up to the biggest loser on theDowon Wednesday.
The crisis around Boeing, once a blue-chip stock, is getting worse. Investors are about to find out exactly how much damage has been done.
Boeing( BA), which reports third quarter earnings on Wednesday, is expected to show a return to profitability. But that will be overshadowed byall the bad newsplaguing the company.
The chief concern:Investors are desperate for guidance on when Boeing’s best-selling plane, the 737 Max, can return to service. The plane has been grounded since March, following two fatal accidents that killed everyone on board.
Boeing has already taken a$ 5 billion chargerelated to compensation it expects to give to its airline customers.
It’s likely to announce a new charge Wednesday because of continuing delays in getting approval for the plane to fly again, according to Cai von Rumohr, an aerospace analyst at Cowen.
The company faces ongoing scrutiny from US regulators about the original certification process for the plane back in 2016.
The Federal Aviation Administration chastised Boeing last week for only recently alerting the agency to concerns expressed during the process by employees.
That revelation has weighed on Boeing shares,which have plunged more than 20% since March.
Shares inSoftBank( (SFTBF))fell 2.5% on Wednesdayafter the Japanese conglomerate confirmeda massive dealto bail out WeWork, the embattled office space startup.
The deal will give SoftBank up to 80% ownership of the beleagured startup. The Japanese company is pumping $ 5 billion into The We Company and accelerating a $ 1.5 billion equity investment originally due next year.
It’s also offering to buy up to $ 3 billion worth of stock from existing investors and shareholders.
(Read more here.)
Mark Parker will step down as Nike’s CEO next yearafter 13 years leading the footwear company,Nike announced late Tuesday.
Parker, 64, has been a Nike employee since 1979, rising through the ranks and holding such positions as product designer and co-brand president. He was appointed CEO in 2006
Parker will hand the reins to John Donahoe, a current Nike ( (NKE) ) board member and CEO of cloud computing company ServiceNow, Inc. (NOW)
Parker, previously chairman of the Nike board, will become executive chairman after he steps down, which he is set to do on January 13, 2020. The company says Donahoe will help propel Nike’s digital transformation, which has been a key element of Nike’s business strategy in recent years.
The shock announcement comes less than two years afterNike had saidParker would remain CEO “beyond 2020. “
Chipotle CEO Brian Niccol said that carne asada contributed to the Chipotle’s good financial results.
Sales at stores openat least 13 months spiked 11%, and revenue jumped 14. 6% to $ 1.4 billionin the third quarter.
The effort showed that “we also now have a muscle where we can do new product innovation,” he added.
But the company warns it’s soon running out of the meat.Read more here.
Asian markets are broadly weaker:
- Hong Kong’sHang Seng IndexHSI)fell by nearly 0.9%after the city’s government said it was having to inject more cash into the local economy to ease the blow from recent protests.
- South Korea’sKospi(KOSPI) and China’sShanghai CompositeIndex (SHCOMP) eachlost 0.4%.
- Japan’sNikkei 225( (N) **********************************************************************************************************************************)closed up 0.3%after trading lower earlier in the day. Japanese markets were closed Tuesday for a holiday.
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