Stock mixed: Apple demand fears drag down tech

Traders
and financial professionals work ahead of the closing bell on the
floor on the New York Stock Exchange (NYSE), October 26, 2018 in
New York City. The Dow Jones Industrial average was down nearly
another 300 points at the close on Friday. Disappointing earnings
numbers from key technology companies, including Amazon and
Alphabet, were driving forces for the markets’
slide.

Drew
Angerer/Getty Images

Stocks were mixed Monday as
technology companies slumped on the eve of elections that could
shift control of Congress.

The Dow Jones Industrial Average
rose 0.76%, and the S&P 500 was up 0.56%. The Nasdaq shed
0.38% as Apple
weighed on the index, dipping to its lowest level in three weeks,
after the Nikkei reported
the company cancelled plans to increase production of the iPhone
XR.

Other high-flying technology
companies followed, with Amazon down more than 2% and Facebook
shedding 1.5%. Insurance companies, on the other hand, gained as
Berkshire
Hathaway led the way higher.

Jim Reid, a strategist at
Deutsche Bank, said the key market issues in midterm
elections are whether to expect further fiscal stimulus and
what the implications are for trade policy. But he noted
they could be positive for equities with or without a shifting
balance of power in Washington. 

“Our US equity strategists have
written extensively on how markets have historically rallied
around midterm elections, though this is equally due to historic
coincidence (growth has tended to be strong around elections) as
the actual elections,” he wrote in a research note. “That said
they expect this scenario to repeat.”

The


dollar

edged lower
against a basket of currencies, while Treasury yields also fell.
The 10-year was down 1.1 basis points to 3.203%, as investors
looked to a

$37 billion sale of three-year
notes

.

The Federal Reserve is expected
to keep monetary policy steady at a meeting Thursday. The central
bank increased its benchmark interest rate by 25 basis points to
2.25% in September, and has signaled the next hike could come in
December.

“The upcoming Federal Reserve
meeting will be another risk event to monitor this week, but
interest rates are not expected to change in November and as long
as the FOMC carries the same narrative that U.S. interest rates
will be gradually adjusted higher in the next 15 months or so,”
said Jameel Ahmad, head of market research at FXTM.

Energy stocks found support as
oil prices rose for the first time in a week, with Brent crude
oil, the international benchmark, up 0.4% to trade near $73 a
barrel. The US reimposed sanctions against Iranian barrels on
Monday, meaning buyers must stop trading oil with the Islamic
Republic or risk facing penalties from Washington.