EUROPE MARKETS: European Chip Stocks Dragged Lower After Texas Instruments' Weak Outlook
23 Oktober 2019 - 12:48PM
Dow Jones News
By Barbara Kollmeyer, MarketWatch
Infineon, Heineken, Peugeot among stocks on the move
European stock markets struggled on Wednesday, with the tech
sector weighing on them after a downbeat outlook from Texas
Instruments hit the chip industry's recovery hopes.
The Stoxx Europe 600 index slipped 0.2% to 394.04, after closing
up 0.09% to 394.59 on Tuesday. On Monday, the index closed at the
highest level since May 22, 2018.
The German DAX was flat at 12761 and the French CAC 40 fell 0.4%
to 5634.43. The U.K. FTSE 100 bucked the trend with a 0.4% gain to
7238.90. The index was lifted by a weaker pound , which fell 0.1%
to $1.2856 as investors absorbed the latest Brexit
developments.
Lawmakers approved a measure advancing UK Prime Minister Boris
Johnson's Brexit deal in Parliament on Tuesday, but rejected a
three-day approval timetable
(http://www.marketwatch.com/story/uks-boris-johnson-inches-toward-securing-brexit-but-with-delays-2019-10-23)
proposed by the government to meet the Oct. 31 deadline to leave
the European Union. While analysts said chances of a no-deal exit
are less likely, a lengthy delay could mean fresh elections for the
country and more uncertainty.
But the bigger focus for Europe was a hefty earnings miss from
Texas Instruments (TXN), which announced a new revenue estimate
range that was as much as a half-billion dollars below Wall
Street's consensus forecast. Investors have been driving up chip
stocks over the past few months on hopes that a turnaround was
coming for the sector.
Opinion:Texas Instruments tanks the chip sector and investors'
hopes for a rebound
(http://www.marketwatch.com/story/texas-instruments-tanks-the-chip-sector-and-investors-hopes-for-a-rebound-2019-10-22)
"TI is generally viewed as one of the more stable companies in
the tech world, so I think this is a bit of a warning shot for
anyone that owns any of the popular tech stocks," Stephen Innes,
Asia Pacific market strategist for AxiTrader, told MarketWatch.
Chip-maker losses in Europe were led by Germany's Infineon
Technologies (IFX.XE) and French-Italian STMicroelectronics
(STM.FR) (STM.FR), with both down around 2%. Dutch ASML (ASML.AE)
(ASML.AE) fell 1%, while software stocks such as SAP (SAP.XE)
(SAP.XE) dropped 1.3%.
U.S. stock futures were modestly lower, after the S&P 500
dropped 0.4% and the Nasdaq Composite fell 0.7% on Tuesday
(http://www.marketwatch.com/story/stock-futures-drift-higher-as-one-of-the-busiest-weeks-for-corporate-earnings-unfolds-2019-10-22).
More big earnings are on tap for Wednesday, including Caterpillar,
the maker of construction and mining equipment, (CAT) and aircraft
manufacturer Boeing (BA)
Also lower were shares of Heineken (HEIA.AE), after the beer
maker reported a rise in nine-month net profit
(http://www.marketwatch.com/story/heineken-nine-month-profit-rises-44-2019-10-23),
but guided slightly lower for full-year organic operating
profit.
Shares of ABB (ABBN.EB) (ABBN.EB) jumped 3.6% after the Swiss
industrial group posted lower net profit and revenue as weak market
conditions affected its robotics and automation business. However,
the company sees improved operating margins for the full year.
Shares of Peugeot (UG.FR) rose 2% after the French auto maker
reported higher revenue for the third quarter, which it said was
boosted by launches of new models.
Akzo Nobel (AKZA.AE) jumped 2% after the Dutch paintmaker
announced a EUR500 million ($556 million) share buyback plan and
higher operating income.
(END) Dow Jones Newswires
October 23, 2019 06:33 ET (10:33 GMT)
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