Europe Markets: European chip stocks dragged lower after Texas Instruments’ weak outlook

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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 SXXP, -0.28% 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 DAX, -0.03%  was flat at 12761 and the French CAC 40 PX1, -0.61%  fell 0.4% to 5634.43. The U.K. FTSE 100 UKX, +0.15%  bucked the trend with a 0.4% gain to 7238.90. The index was lifted by a weaker pound GBPUSD, -0.0932%, 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 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, -1.80%, 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

“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, -2.51%  and French-Italian STMicroelectronics STM, -1.63% STM, -1.52%, with both down around 2%. Dutch ASML ASML, -1.19% ASML, -1.97%  fell 1%, while software stocks such as SAP SAP, -0.69% SAP, -0.94%  dropped 1.3%.

U.S. stock futures YM00, -0.34%  were modestly lower, after the S&P 500 SPX, -0.36%  dropped 0.4% and the Nasdaq Composite COMP, -0.72%  fell 0.7% on Tuesday. More big earnings are on tap for Wednesday, including Caterpillar, the maker of construction and mining equipment, CAT, +1.10%  and aircraft manufacturer Boeing BA, +1.79%

Also lower were shares of Heineken HEIA, -2.73%,  after the beer maker reported a rise in nine-month net profit, but guided slightly lower for full-year organic operating profit.

Shares of ABB ABB, -0.46% ABB, +3.57% 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, +2.33%  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, +2.25%  jumped 2% after the Dutch paintmaker announced a €500 million ($556 million) share buyback plan and higher operating income.