* Apple falls on weak iPhone demand concerns, tech sector weak
* Consumer Staple sector underperforms broader market
* Oil prices turn negative after Trump criticizes OPEC
* Bank stocks outperform on higher bond yields
* Indexes down: Dow 0.91 pct, S&P 500 0.90 pct, Nasdaq 1.27 pct (Updates to late afternoon, adds commentary, changes byline, adds NEW YORK dateline)
By Sinéad Carew
NEW YORK April 20 (Reuters) - U.S. stocks fell on Friday, as Apple led a decline in technology stocks amid fears about weak iPhone demand and investors worried about the impact of a rise in U.S. bond yields on equities.
The S&P technology index was the biggest drag on the S&P 500 as it was on track for three straight days of declines with a 1.5 percent drop. The consumer staples sector was the next biggest drag with a 1.7 percent fall, led by PepsiCo, which was down 2.9 percent.
"There continues to be some concern over interest rates and their potential impact on equities. There's also been a little bit of a lack of momentum in this earnings period," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
"It's not that earnings weren't good enough but company forecasts often weren't strong enough to make the market continue to rise," he said.
Also, investors were also jittery as the 10-year Treasury yield reached its highest level since March 21 as a bond selloff continued for a second day, driving the yield curve steeper after two weeks of flattening.
When yields are high, investors favor bonds over defensive sectors such as consumer staples and real estate, which promise high dividends and slow, predictable growth. But banks benefit because high interest rates can boost their profits. The financial sector was last down 0.1 percent, the best performer out of the S&P's 11 industry sectors.
At 2:38 p.m. ET, the Dow Jones Industrial Average fell 223.45 points, or 0.91 percent, to 24,441.44, the S&P 500 lost 24.11 points, or 0.90 percent, to 2,669.02 and the Nasdaq Composite dropped 91.84 points, or 1.27 percent, to 7,146.22.
Despite Friday's decline the S&P was on track for its second weekly increase in a row.
Apple was down 4 percent, making it the biggest drag on the major indexes after Morgan Stanley estimated weak demand for its latest iPhones, a day after Taiwan Semiconductor raised fears of softer smartphone sales.
"There's the Apple news and there maybe some nervousness coming into the upcoming earnings reports," said Daniel Morgan, senior portfolio manager at Synovus Trust Co in Atlanta.
Alphabet, Facebook, Intel and Microsoft are among the major technology companies reporting next week.
S&P 500 companies are expected to report their strongest first-quarter profit gains in seven years. Of the 87 companies that have reported so far, 79.3 percent have topped profit expectations, according to Thomson Reuters I/B/E/S.
General Electric jumped 4.4 percent after it posted quarterly results that topped estimates and affirmed its 2018 forecasts.
Oil prices were down after U.S. President Donald Trump criticized OPEC and said oil prices were artificially high. The S&P energy index fell 0.6 percent.
Declining issues outnumbered advancing ones on the NYSE by a 2.40-to-1 ratio; on Nasdaq, a 1.70-to-1 ratio favored decliners.
The S&P 500 posted 12 new 52-week highs and 20 new lows; the Nasdaq Composite recorded 49 new highs and 42 new lows. (Additional reporting by April Joyner in New York, Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Chizu Nomiyama)