U.S. stocks mostly rose Monday. Financial and healthcare companies finished higher, while Apple and other technology companies continued to fall. Asian indexes fell on weak economic data in China and a lack of progress in U.S.-China trade negotiations.
Warren Buffett's Berkshire Hathaway, a conglomerate that owns Geico and other insurance businesses, led the rally in financial stocks after it reported strong results over the weekend. Drugmakers including Eli Lilly also climbed. Apple took another sharp loss, which knocked the tech giant's market value below the $1-trillion mark.
Real estate companies, utilities and other high-dividend stocks finished with solid gains as high-growth stocks such as tech and internet companies slipped. Smaller and more U.S.-focused companies also lagged.
Big technology companies and small companies were hit hard during the market's slump in October. Tech companies fell as investors worried about the trade dispute and about an increase in interest rates, which could erode their future profits. Smaller companies are vulnerable to higher interest rates because they tend to carry more debt.
Earnings for companies in the Standard & Poor’s 500 index are on track to grow about 20% this year, and analysts expect company profits to grow an additional 10% 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 corporate earnings could 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.
The S&P 500 rose 15.25 points, or 0.6%, to 2,738.31. The Dow Jones industrial average climbed 190.87 points, or 0.8%, to 25,461.70.
The Nasdaq composite fell 28.14 points, or 0.4%, to 7,328.85. The Russell 2000 index of smaller-company stocks slipped 0.47 of a point to 1,547.51.
Stocks dived in October, but last week was the market's best week since March. One reason for that rebound was increased optimism about trade talks, as Chinese officials and President Trump said a phone conversation between Trump and Chinese President Xi Jinping had gone well. On Monday, Xi promised to reduce costs for importers and raise consumer spending power, but he did not address the technology policy dispute between the United States and China — a key part of the trade impasse.
Berkshire Hathaway 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 4.7% to $216.24. Other insurers and banks also rose.
Apple fell 2.8% to $201.59, deepening a slide that began last week. The stock tumbled Friday after Apple issued a weak fourth-quarter forecast and said it will stop announcing how many iPhones it sold each quarter. Daniel Ives of Wedbush said that Apple's announcement felt “flippant,” but that it actually was 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. Monday's decline brought its value down to $958.6 billion.
Benchmark U.S. crude slipped 0.1% to $63.10 a barrel in New York. Brent crude, used to price international oils, rose 0.5% to $73.17 a barrel in London.
Natural gas soared 8.6% to $3.57 per 1,000 cubic feet after forecasts for cold weather in the next few days. According to the Energy Department, nearly half of U.S. households use natural gas as their primary source for heating. Its price often surges when investors expect a cold snap.
Heating oil rose 1.1% to $2.20 a gallon. Wholesale gasoline fell 1% to $1.69 a gallon.
Bond prices rose. The yield on the 10-year Treasury note fell to 3.20% from 3.21%.
Gold fell 0.1% to $1,232.30 an ounce. Silver fell 0.7% to $14.65 an ounce. Copper fell 1.8% to $2.76 a pound.
The dollar slipped to 113.21 yen from 113.28 yen. The euro rose to $1.1418 from $1.1398.
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 $1.3053 from $1.2963.