US STOCKS-Wall Street drops as trade worries resurface

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* China casts doubts about long-term trade deal
* Apple, Facebook gain on upbeat results
* Estee Lauder falls after profit forecast cut
* Indexes down: Dow 0.81%, S&P 0.61%, Nasdaq 0.41%

(Updates to early afternoon)
By Arjun Panchadar
Oct 31 (Reuters) - U.S. stocks fell on Thursday as worries
that the United States and China may not be able to strike a
trade deal overshadowed strong earnings reports from Apple and
Facebook.
The S&P 500 .SPX was on pace for its biggest drop in
nearly three weeks, after notching intraday record highs in the
past three sessions.
All of its 11 major sectors were either trading flat or in
the red. Interest-rate sensitive bank stocks .SPXBK shed 1.5%,
a day after the Federal Reserve lowered borrowing costs for the
third time this year.
Tempering recent optimism around trade was a Bloomberg
report that said Chinese officials have doubts about whether it
is possible to reach a comprehensive long-term trade deal with
Washington and U.S. President Donald Trump. However, Trump said the two countries would soon announce a
new site where a "Phase One" trade deal will be signed after
Chile cancelled a planned summit set for mid-November.
"Trade headlines continue to offset solid earnings and
optimism from the Fed and rightfully so because the global
economy is really struggling right now and most of it has to do
with trade," said Ryan Nauman, market strategist at Informa
Financial Intelligence in Zephyr Cove, Nevada.
The trade-sensitive industrials sector .SPLRCI shed 1.23%,
while China exposed chipmakers also fell, with the Philadelphia
Semiconductor index .SOX slipping 1.14%.
However, corporate earnings were a bright spot. Apple Inc
AAPL.O rose 2% after the iPhone maker forecast sales for the
holiday shopping quarter ahead of expectations. Facebook Inc FB.O gained 2% after reporting an uptick in
users in lucrative markets and its third straight rise in
quarterly sales growth. At 12:34 a.m. ET the Dow Jones Industrial Average .DJI was
down 221.13 points, or 0.81%, at 26,965.56, the S&P 500 .SPX
was down 18.72 points, or 0.61%, at 3,028.05 and the Nasdaq
Composite .IXIC was down 34.41 points, or 0.41%, at 8,269.57.
Data on Thursday showed a marginal rise in consumer spending
in September, casting doubts on consumers' ability to continue
driving the economy.
The Labor Department's crucial jobs data on Friday will be
closely watched after the Fed signalled on Wednesday that there
would be no further cuts unless the economy takes a turn for the
worse. "You have a solid economy, a strong consumer but negative
headlines on trade and slowing global growth. They are
offsetting each other and that's what we're seeing in the
markets," Nauman said.
Among other stocks, Estee Lauder Cos Inc EL.N fell 4.8%
after the cosmetics maker cut its forecast for full-year profit.
Kraft Heinz Co KHC.O jumped 13% as the packaged foods
company said it was spending more on marketing key brands next
year, after reporting a better-than-expected third-quarter
profit. Declining issues outnumbered advancers for a 2.01-to-1 ratio
on the NYSE and for a 2.22-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and five new
lows, while the Nasdaq recorded 54 new highs and 63 new lows.