* IBM down after bigger-than-expected drop in revenue
* Minutes of Fed’s Sept. meeting due at 2 pm ET (1800 GMT)
* Netflix surges after subscriber growth tops estimates
* United Airlines rises after upbeat quarter; boosts rivals
* Futures dip: Dow 0.33 pct, S&P 0.30 pct, Nasdaq 0.37 pct
By Medha Singh
Oct 17 (Reuters) - U.S. stock futures fell on Wednesday, a day after Wall Street’s strongest rally in seven months, as investors were disappointed with IBM’s results and remained cautious ahead of the minutes of Federal Reserve’s latest meeting.
Shares of IBM fell 4.8 percent in premarket trading after the company’s quarterly revenue fell more than expected, pointing to a bumpy recovery for the member of the Dow Jones Industrial Average.
IBM’s results follow strong reports from other Dow members such as Goldman Sachs, UnitedHealth and Johnson & Johnson, which helped U.S. stocks jump more than 2 percent on Tuesday to claw back some losses from the recent selloff.
The selloff last week was mainly driven by worries over how corporate profit would be affected by tariffs, growing wages, rising interest rates and an increasingly hawkish Fed, which President Donald Trump called “my biggest threat”.
The minutes of the Fed’s September policy meeting, at which it raised rates for the third time this year, is due at 2:00 p.m. ET (1800 GMT). Since the meeting, a string of strong economic data has prompted Fed policymakers to say they expect to continue a rate-hike cycle that began in late 2015.
“The (stock) indices are pulling back after yesterdays blockbuster earnings rally that is likely to be challenged by the Fed’s FOMC minutes,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Even a 11.3 percent surge in Netflix after its blowout subscriber addition numbers failed to help the indexes.
At 7:42 a.m. ET, Dow e-minis were down 85 points, or 0.33 percent. S&P 500 e-minis were down 8.5 points, or 0.30 percent and Nasdaq 100 e-minis were down 27.5 points, or 0.37 percent.
United Airlines shares climbed 6.0 percent after a solid third-quarter profit and again raising it 2018 outlook. That also lifted American Airlines 3.9 percent and Delta Air Lines 3.5 percent.
The struggling semiconductor sector got a lift after industry bellwether ASML Holding NV’s bullish results and outlook eased fears of slackening demand.
ASML’s U.S. shares rose 2.2 percent, while other chip gear makers such as LAM Research, Applied Material and KLA Tencor rose between 3.3 percent and 6.8 percent.
On the data front, a Commerce Department report at 8:30 a.m. ET is likely to show homebuilding fell in September to 1.220 million houses from a reading of 1.282 million last month.
A separate report is expected to show building permits edged up to 1.278 million units from 1.249 units in the same period. (Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva)