A ROTTEN APPLE STALLS RALLY

11/02/18

The major averages rallied at the open today despite a -6.63% drop in shares of Apple Co. (AAPL) after a weaker than expected forecast on growth prospects.

A late night tweet from the White House that a trade deal with China was moving forward brought buyers back in for a fourth day but the market gains dissipated midmorning. A 200-point jump in the Dow turned into a 300-point loss as conflicting reports on trade led to a volatile session.

The different indexes finished well off their lows but every sector except Consumer Discretionary (XLY) closed red. Losses in Technology (XLK), Communication Services (XLC) and REITs (XLRE) weighed on the market. Also troubling investors was a strong jobs report that showed some wage inflation which probably sealed the deal for a rate hike in December.

Yields moved higher and the 10-year Treasury hit 3.22% while the 30-year yield reached its highest level in four years at 3.5%. At the close the DJIA was down 109.91 points (-0.43%) at 25270.83 while the S&P 500 slipped 17.31 points (-0.63%) to 2723.06. The NASDAQ lost 77.06 points (-1.04%) and settled at 7356.99. The Russell 2000 and S&P MidCap Index posted positive.