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Dow Jones Futures: Stock Market Rally Hits Ceiling; Nike, ServiceNow, Chipotle, Snap, Texas Instruments, Caterpillar In Focus

Dow Jones futures fell early Wednesday, along with S&P 500 futures and Nasdaq futures. The stock market rally had a tough session as the major indexes closed near session lows, with recent leaders and battered growth stocks hit hard. Chipotle Mexican Grill (CMG), Snapchat parent Snap (SNAP) and Texas Instruments (TXN) reported earnings after the close, while Caterpillar (CAT) reported before the open. Meanwhile, Nike (NKE) CEO Mark Parker will step down, to be replaced by John Donahoe, a Nike board member and CEO of software maker ServiceNow (NOW).

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Chipotle stock fell overnight while Snap stock rose in volatile action. Texas Instruments stock dived on a poor outlook. Caterpillar stock fell on weak earnings, sales and guidance. Fellow Dow Jones giant Nike stock was unchanged. ServiceNow stock plunged on the CEO exit and some Q3 metrics.

Meanwhile, Boeing earnings were even worse than expected, though sales topped. The Dow Jones giant is sticking to its target for 737 Max flights to resume this year, but is cutting 787 Dreamliner production. Boeing (BA) initially fell more than 3% but reversed slightly higher.

Dow Jones Futures Today

Dow Jones futures fell 0.1% vs. fair value, swinging on earnings. Dow Jones futures have been volatile, tumbling with Caterpillar stock and Boeing stock and rebounding with those two blue chips.

S&P 500 futures sank 0.2%. Nasdaq 100 futures retreated 0.35% as Texas Instruments stock tumbled, weighing on techs. Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

Current Stock Market Rally

The current stock market rally had a tough session, closing near session lows.

The Dow Jones Industrial Average fell 0.15%, the S&P 500 index lost 0.4% and the Nasdaq composite shed 0.7%.

The S&P 500 outperformed thanks to the health care sector. Biogen (BIIB) soared 26% on plans to seek approval for an Alzheimer's treatment, leading biotechs, while Centene (CNC) earnings fueled health insurers. Vertex Pharmaceuticals (VRTX) gapped up toward a buy point on FDA approval for a triple-drug cystic fibrosis treatment.

But several recent breakouts faltered while fallen growth leaders suffered yet again.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.3%. The iShares Expanded Tech-Software Sector ETF (IGV) sank 2%, then kept falling overnight with ServiceNow stock crashing, weighing on other software names. The VanEck Vectors Semiconductor ETF (SMH) dipped 0.8%, but fell much more overnight as Texas Instruments stock led a broad retreat among chipmakers. The iShares Nasdaq Biotechnology ETF (IBB) rose 1.7% but closed near session lows, below its 200-day line.

The Dow Jones today, like the S&P 500 index and Nasdaq composite, remains above its 50-day moving average and close to record highs. But the stock market rally has struggled to convincingly move into new high ground since early 2018, with successful attempts not lasting for long.

Nike CEO Mark Parker Steps Down

Nike CEO Mark Parker will step down in January, though he'll remain chairman. The Dow Jones athletic apparel giant named ServiceNow CEO John Donahoe as his successor. Donahoe already is on the Nike board of directors. Before running software maker ServiceNow, he was chairman and CEO of eBay (EBAY) and previously ran Bain Capital.

Nike stock was flat before Wednesday's open.. Shares of the Dow Jones giant edged down 0.6% to 95.40 on Tuesday but are essentially at record highs.

ServiceNow Stock Crashes

The software maker named Bill McDermott as its CEO, effective by Dec. 31. McDermott was CEO of German software giant SAP (SAP) until earlier this month. ServiceNow also released some Q3 financial figures, a day ahead of its official release.

The ServiceNow CEO departure and disappointing preliminary figures did not go over well with investors. ServiceNow stock plunged nearly 8% before the open, though off overnight lows. That's after ServiceNow stock fell 5.2% on Tuesday to 228.34, its lowest level since early February.

Chipotle Earnings

Chipotle earnings spiked 77% to $3.82 a share, the hottest gain in seven quarters. Revenue grew nearly 15% to $1.4 billion, the best in nine quarters. Same-store sales leapt 11%, as digital sales boomed. Analysts expected Chipotle earnings of $3.16 a share on revenue of $1.38 billion. Consensus Metrix expected same-store sales to surge 9.3%.

Chipotle guided high on full-year comps, but said new restaurant openings may be at the low end of targets as it builds drive-thru "Chipotlanes."

Chipotle stock fell 1.9% early Wednesday. Shares fell 2.4% to 831.07 on Tuesday. Chipotle stock is working on a 858 buy point from a short flat base. It's been finding support at its 50-day line, but could test that level Wednesday.

Caterpillar Earnings

Caterpillar earnings fell 8% to $2.66 a share vs. estimates for $2.82. It was the second straight of year-over-year declines for Caterpillar EPS. Revenue fell nearly 6% to $12.76 billion, also badly missing. The global construction and mining equipment giant, seen as a global economic bellwether, also slashed full-year guidance.

Caterpillar stock slid 1.6% after tumbling more than 4% initially.

Snap Earnings

The Snapchat parent narrowed its loss to 4 cents a share adjusted. Revenue swelled 50% to $446 million, the third straight quarter of accelerating top-line growth. Wall Street expected a 5-cent loss on revenue of $437.6 million.

Daily active users rose to 210 million, better than expected. Snap guided high on Q4 users. The midpoint of its revenue guidance was slightly below consensus.

Snap stock rose 0.8% before the open following volatile, mostly negative action overnight. That's after sinking 4% to 14 on Tuesday. Snap stock came close to an 18.46 buy point a month ago but reversed lower and kept falling to between its 50-day and 200-day lines.

Texas Instruments Earnings

Texas Instruments earnings fell 6% to $1.49 a share. Sales slid 11% to $3.77 billion, the fourth straight quarter of declining revenue. Analysts expected Texas Instruments earnings of $1.41 and sales of $3.81 billion.

Texas Instruments guided lower for current-quarter earnings and sales, a bad sign for investors looking for a chip industry recovery.

Texas Instruments stock plunged 8% before the open. Shares slid 1.8% on Tuesday to 128.57, falling just below a 130.47 flat-base buy point. Texas Instruments stock initially topped that entry on Sept. 12, but didn't close in the buy zone until Oct. 15.

Shares of Nvidia (NVDA), Intel (INTC) and AMD (AMD) were among the overnight chip losers.

On the upside, chip equipment maker Teradyne (TER) reported better-than-expected earnings and sales, along with upbeat guidance. Teradyne stock jumped overnight, after holding in a buy zone.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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