Stocks' Macro Focus Centers on Fed; Apple Lower, Housing Stocks Gain

The S&P 500 ($SPX) tips lower in early action, leaving the broad index on track for a fifth straight drop as worries for a potential interest rate overshoot brew again. The drop pushed the Dow Jones Industrial Average ($DJI) lower for the year.

The Federal Reserve has signaled its inclination to raise interest rates for the first time since 2006 when it meets next month. Fed funds futures traders place the odds for a quarter-point increase in December at better than 70%. While higher rates could be symptomatic of an improving economy—sentiment that could energize stock bulls—there remains lingering concern that the Fed will be cranking up its interest rate dial at a time when much of the rest of the world is still looking to juice sluggish growth with steady to lower rates or other means of stimulating growth. China, for example, reported weak inflation numbers overnight despite its several efforts to pump up growth.

As stocks drop, so are bonds. That means the benchmark 10-year Treasury yield, one measure of interest rate sentiment, has pushed up to just over 2.3% in recent sessions, its highest in about four months. The dollar is firmer against its rivals, complicating the future earnings position for multinational companies.

Home Builder Results. Home builder D.R. Horton DHI today said profit soared 44% in its fiscal Q4. Both earnings and revenue, driven by higher orders and closings, topped Wall Street expectations. The results follow largely upbeat government and industry housing results in recent reports. DHI also boosted its quarterly dividend to 8 cents a common share, an increase of 28%.

Apple’s Bite. Apple AAPL fell 2% early Tuesday, adding to the drag on the broader market, after Credit Suisse said the company's supply-chain orders have weakened recently in Asia. The analyst note projected that setback could weigh on Apple's shares for the "next few weeks/quarters." Apple has lowered its component orders by as much as 10%, according to Credit Suisse.