US STOCKS-Wall Street falls on U.S.-China trade jitters

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* China casts doubts about long-term trade deal
* Apple, Facebook gain on upbeat earnings
* Estee Lauder falls after profit forecast cut
* Indexes down: Dow 0.69%, S&P 0.50%, Nasdaq 0.26%

(Adds comment, updates market action)
By Arjun Panchadar
Oct 31 (Reuters) - U.S. stocks dropped on Thursday as
worries that the United States and China may not be able to
strike a trade deal cast a shadow over strong earnings reports
from Apple and Facebook.
The S&P 500 was dragged down by losses in interest-rate
sensitive bank stocks .SPXBK , a day after the Federal Reserve
lowered borrowing costs for the third time this year. The
benchmark index has notched record highs in the past three
sessions.
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 dropped
1.30%. Chipmakers, which have a sizable exposure to China, also
fell, with the Philadelphia Semiconductor index .SOX slipping
1.02%.
However, corporate earnings were a bright spot. Apple Inc
AAPL.O rose 2.1% after the iPhone maker forecast sales for the
holiday shopping quarter ahead of expectations. Facebook Inc FB.O gained 3% after reporting an uptick in
users in lucrative markets and its third straight rise in
quarterly sales growth. 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.
At 11:33 a.m. ET the Dow Jones Industrial Average .DJI was
down 188.64 points, or 0.69%, at 26,998.05, the S&P 500 .SPX
was down 15.21 points, or 0.50%, at 3,031.56 and the Nasdaq
Composite .IXIC was down 21.46 points, or 0.26%, at 8,282.52.
Among other stocks, Estee Lauder Cos Inc EL.N fell 5%
after the cosmetics maker cut its forecast for full-year profit.
Kraft Heinz Co KHC.O rose 12% 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. Twitter Inc TWTR.N dropped 1.5% after the company said it
will ban political advertising on its platform next month.
Declining issues outnumbered advancers for a 2.00-to-1 ratio
on the NYSE and for a 2.08-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and five new
lows, while the Nasdaq recorded 51 new highs and 55 new lows.