U.S. stocks finished lower on Thursday, as fading trade optimism and disappointing data updates offset solid corporate earnings reports. The Dow slid 140 points, capping its monthly gain to 0.5%. The S&P 500 lost 0.3%, but ended October 2% higher. The Nasdaq Composite fell 0.1%, but advanced 3.7% for the month.
A report indicated Chinese officials are skeptical that Washington and Beijing could reach a long-term trade deal. However, President Trump attempted to alleviate concerns by signaling that the “Phase One” trade deal will be signed next month. On the data front, the Fed’s preferred proxy for inflation, the PCE Core deflator, showed a 1.7% gain year-over-year, below last month’s figure of 1.8%, and matching the slowest pace since 2016. Another release revealed business activity in the Chicago region remained in contractionary territory in October, with the gauge falling to the lowest level since 2015. Treasuries extended gains, with the yield on the benchmark 10-year note down nine basis points to 1.68%.
Nine of 11 S&P 500 sectors finished in negative territory. The Industrials sector, which has widely been viewed as a proxy of the trade dispute, lead the laggards. In earnings, Apple advanced 2.3% after the iPhone maker beat analysts’ earnings per share estimates citing wearables and payment services as key drivers. Facebook gained 1.8% after the social media company beat profit estimates and Wall Street’s revenue per user forecasts. Kraft Heinz jumped 13.4% after beating profit estimates and organic growth declining less than expected.
In commodities, WTI crude fell 1.6% to $54.18/barrel, but posted its first monthly gain since July.