Stocks Set to Sell Off After Dow Earnings

Earnings reports from 3M and Caterpillar showed the negative effects of recently implemented tariffs

Oct 23, 2018 at 9:10 AM
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Dow Jones Industrial Average (DJI) futures are pointing to a major sell-off, as traders react to a heavy round of blue-chip earnings. Most notably, shares of 3M (MMM) and Caterpillar (CAT) are set for sharp losses at the open, with 3M's results negatively affected by foreign currency impacts and Caterpillar feeling the crunch of steel tariffs as the U.S.-China trade standoff continues. Investors are also digesting earnings reports from Dow components United Technologies (UTX), Verizon (VZ), and McDonald's (MCD). Financial and tech stocks are signaling notable pre-market losses, too, with futures on the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) trading well below fair value.

Continue reading for more on today's market, including:

us stock futures oct 23

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 907,384 call contracts traded on Monday, compared to 519,810 put contracts. The single-session equity put/call ratio fell to 0.57, and the 21-day moving average held at 0.65.
  2. MMM is set to open down 7.8%, and CAT is down 8.1% in pre-market trading. 3M missed third-quarter earnings estimates and gave a weaker-than-expected full-year outlook -- not entirely surprising, after the company warned of rising material costs -- while Caterpillar is also getting hit due to a tepid forecast, and CAT stock could hit fresh lows as a result.
  3. PulteGroup, Inc. (NYSE:PHM) is eyeing a flat open after the homebuilder's third-quarter results. PHM's profit topped expectations for the period thanks to higher home prices, as the stock tries to stem the bleeding from some of its massive losses racked up earlier this year.
  4. Biogen Inc (NASDAQ:BIIB) is set to drop just 0.2% after earnings -- a far cry from the volatile move options traders were expecting. The company posted a top- and bottom-line beat, fueled by strong sales for its muscle disease drug Spinraza.
  5. Atlanta Fed President Raphael Bostic is scheduled to speak today, as well as Minneapolis Fed President Neel Kashkari and Chicago Fed President Charles Evans. Corning (GLW), Fifth Third (FITB), Harley-Davidson (HOG), Huntington Banc (HBAN), and Lockheed Martin (LMT) are also on the earnings schedule.

stocks in the news premarket 1023

Big Losses For Asian Stock Markets

Asian stocks fell sharply in today's trading, as geopolitical tensions ramped up. Markets quickly reversed from yesterday's impressive gains, with Japan's Nikkei ending down 2.7%, China's Shanghai Composite surrendering 2.3%, and South Korea's Kospi shedding 2.6%. Taking the biggest hit, however, was Hong Kong's Hang Seng, which closed 3.1% lower.

European markets are selling off as geopolitical worries, Brexit talks, and disappointing tech sector earnings weigh on investor sentiment. Leading today's losses is Germany's DAX, which is down 1.7%, at last check. London's FTSE 100 and France's CAC 40 are not far behind, with the indexes sporting 1% and 1.1% losses, respectively.

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