FILE - In this Tuesday, Oct. 23, 2018, file photo trader Peter Tuchman, center, works on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Monday, Nov. 5. (AP Photo/Richard Drew, File)

Health care companies and banks climb; Apple falls

November 05, 2018 - 2:15 pm

NEW YORK (AP) — U.S. stocks are rising Monday as Warren Buffett's Berkshire Hathaway leads gains in insurers and other financial companies. Health care companies are also rising, led by drugmakers.

Technology and internet companies continue to struggle as Apple drops again. Asian indexes fell following weak economic data in China and a lack of progress in trade negotiations between the U.S. and China.

Last week was the market's best week since March. That came after a steep drop in October.

KEEPING SCORE: The S&P 500 index added 18 points, or 0.7 percent, to 2,741 as of 3:10 p.m. Eastern time. The Dow Jones Industrial Average rose 216 points, or 0.8 percent, to 25,487.

The Nasdaq composite sank 24 points, or 0.3 percent, to 7,332. The Russell 2000 index of smaller-company stocks picked up 1 point, or 0.1 percent, to 1,549.

Both of those indexes were hit hard during the market's slump last month. Technology companies fell as investors worried about the trade dispute and about an increase in interest rates, which could erode the future profits of those companies. Smaller companies are vulnerable to higher interest rates because they tend to carry more debt.

THE QUOTE: Earnings for S&P 500 companies are on track to grow about 20 percent this year, and analysts expect company profits to grow another 10 percent next year, according to FactSet. But Jim Paulsen, chief investment strategist for the Leuthold Group, said that might be too optimistic because costs and interest rates are rising and global economic growth could slip.

"It's a double whammy of slowing sales at the same time we may be starting to (see pressure on) profit margins," he said. Paulsen said it's possible earnings will fall next year, and smaller companies might have a hard time dealing with that.

"Large companies tend to operate with bigger profit margins, and they have more room as a result of that to allow them to cut and to deal with a slowdown," he said.

BANK ON BUFFETT: Warren Buffett's Berkshire Hathaway conglomerate said its profit quadrupled in the third quarter as the value of its investments climbed. It also reported better results from its insurance and railroad divisions. Berkshire bought back almost $1 billion in stock during the quarter, the most in years. Its Class B stock climbed 5.2 percent to $217.27.

Other financial companies also rose. Insurer MetLife gained 3.5 percent to $44.67 and Citigroup picked up 2.2 percent to $67.35.

APPLE FALLS FAR: Apple lost another 3.1 percent to $200.97. The stock tumbled Friday following a weak fourth-quarter forecast. Apple also said it will stop announcing how many iPhones it sold each quarter. Daniel Ives of Wedbush said Apple's announcement felt "flippant," but it's actually part of a strategy intended to get investors to see the company as a services provider and not just a device seller.

In early August Apple became the first publicly traded company valued at $1 trillion. It's remained above that mark since then, but with Monday's decline it's on pace to finish with a valuation of about $955 billion.

U.S.-CHINA TRADE: Chinese President Xi Jinping Xi promised Monday to reduce costs for importers and raise consumer spending power, but he did not address the technology policy dispute between the U.S. and China, a critical part of the trade impasse between them. Global markets, especially in Asia, had risen Friday after Chinese officials and President Donald Trump said a phone conversation between the two leaders had gone well.

Japan's Nikkei 225 index fell 1.5 percent and South Korea's Kospi dropped 0.9 percent. Hong Kong's Hang Seng index fell 2.1 percent.

TRIAL DATA: Eli Lilly jumped 4 percent to $111.04 after the company said patients who took its type 2 diabetes drug Trulicity were less likely to have a heart attack or other major heart problems during a clinical trial. The study compared Trulicity, an injection given once a week, to standard treatments.

Elsewhere, AbbVie climbed 4.7 percent to $82.39 and Merck rose 1.5 percent to $73.35.

ENERGY: Benchmark U.S. crude slipped 0.1 percent to $63.10 a barrel in New York. Brent crude, used to price international oils, added 0.5 percent to $73.17 per barrel in London.

Natural gas soared 8.6 percent to $3.57 per 1,000 cubic feet following forecasts for cold weather in the next few days. According to the Energy Department, nearly half of all U.S. households use natural gas as the primary source for heating. Its price often surges when investors expect a cold snap. Heating oil also rose 1.1 percent to $2.20 a gallon.

Chevron jumped 3.8 percent to $119.10 and EQT climbed 7.2 percent to $35.03.

Wholesale gasoline lost 1 percent to $1.69 a gallon.

EUROPE: Britain's FTSE 100 rose 0.1 percent while Germany's DAZ fell 0.2 percent. The CAC 40 in France was little changed.

The British pound rose even though the office of British Prime Minister Theresa May dismissed reports the country is close to reaching a divorce agreement with the European Union. Officials have said negotiators are on the brink of a deal, which could be reached this month.

The pound rose to $1.3042 from $1.2963.

BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 3.20 percent from 3.21 percent late Friday.

METALS: Gold fell 0.1 percent to $1,232.30 an ounce. Silver lost 0.7 percent to $14.65 an ounce. Copper shed 1.8 percent to $2.76 a pound.

CURRENCIES: The dollar fell to 113.19 yen from 113.28 yen. The euro rose to $1.1420 from $1.1398.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP

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