Apple falls 1.5 pct and weighs most on three major indexes after Goldman Sachs

A drop in technology stocks on Monday kept the pressure on Wall Street and led the Nasdaq lower, but the S&P 500 and Dow Jones Industrial Average eked out slim gains as defensive sectors rose, while traders also pointed to technical support.

Apple fell 1.5 per cent and weighed the most on the three major indexes after Goldman Sachs said there were multiple signs of rapidly slowing consumer demand in China, which could affect demand for iPhones this fall.

The technology index fell 0.8 per cent, the most among the 11 S&P sectors. The defensive real estate and consumer staples indexes jumped about 1.30 per cent, while utilities rose 0.79 per cent.

"It's almost as if a ceasefire has been called in the market between the bulls and the bears. There is hesitation to make a move in either direction right now and the best term to describe it is probably 'nervous,'" said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

Wall Street is coming off a steep selloff last week, its worst in seven months, on mounting fears about the impact of tariffs and rising borrowing costs on corporate profits, with the third-quarter earnings season kicking into high gear this week.

Profit growth at S&P companies is expected to have slowed, to 21.6 per cent, compared with the past two quarters, according to I/B/E/S data from Refinitiv. The first major earnings report this week was also not well received.

Bank of America dropped 1.4 per cent after its loan growth lagged rivals, and fees from advising on deals and underwriting bonds fell in the third quarter.

Also adding to nerves was the rising tension between Western powers and Saudi Arabia over the disappearance of journalist Jamal Khashoggi. Saudi Arabia holds stakes in big U.S. companies and also finances SoftBank Group's Vision Fund, the world's largest technology investment vehicle.

Antonelli also said the S&P was getting some support from its 200-day moving average, a key indicator of long-term momentum, of 2,766.56 points, which the "bulls are trying to defend". The Dow was holding near its 100-day moving average.

At 1:40 p.m. ET, the S&P 500 was up 3.07 points, or 0.11 per cent, at 2,770.20.

The Dow was up 72.45 points, or 0.29 per cent, at 25,412.44, while the Nasdaq Composite was down 17.98 points, or 0.24 per cent, at 7,478.91.

Helping the Dow was Walt Disney's 1.7 per cent rise. The company has offered concessions in an attempt to allay EU antitrust concerns over its $71.3 billion bid for Twenty-First Century Fox's entertainment assets. Fox rose 0.7 per cent.

The top gainers on the S&P were L3 Technologies, which jumped 11.9 per cent, and Harris Corp, which climbed 10.9 per cent after the military communication equipment providers announced an all-stock merger to create the sixth-largest U.S. defence contractor.

Advancing issues outnumbered decliners for a 1.87-to-1 ratio on the NYSE and a 1.31-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and seven new lows, while the Nasdaq recorded 11 new highs and 125 new lows. 

(With inputs from agencies.)