(Adds close of U.S. markets)
* Report stirs doubts on U.S.-China trade deal
* Dollar eases after Fed cuts interest rates
* U.S. Treasuries, euro zone bond yields fall
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Herbert Lash
NEW YORK, Oct 31 (Reuters) - World stock markets slid from
20-month highs on Thursday as uncertainty about a U.S.-China
trade deal offset strong results from Apple and Facebook, while
the dollar weakened as investors mulled whether the Federal
Reserve will cut rates further.
Chinese officials doubt a comprehensive long-term trade deal
with Washington and U.S. President Donald Trump is doable,
Bloomberg reported, citing unidentified sources. The trade spat between the world's largest economies has
been a major focal point for investors as it has disrupted
supply chains and roiled financial markets for more than a year.
MSCI's gauge of equity performance in 47 countries
.MIWD00000PUS slid 0.15% from highs last reached in February
2018.
The dollar fell to a 10-day low against a basket of major
currencies after the Fed cut rates on Wednesday.
The Fed lowered its policy rate by a quarter of a percentage
point to a target range of 1.50% to 1.75%.
Investors remain concerned about a U.S. slowdown as the
trade war continues, which could force the Fed's hand.
"If things were to go negative, they are more likely to ease
than raise interest rates," said Steven Wieting, chief economist
and investment strategist at Citi Private Bank in New York.
However, the underlying story has been the U.S. economy's
ability to outlast the downturn in manufacturing output, a
development that recently has been underrated by the market, he
said.
"It has further to go; just the fact we can absorb the
shocks that we have," Wieting said. "Production is going to go
from declining to rebounding. That's what is going to happen
with earnings as well."
European stocks fell. The pan-European STOXX 600 index
.STOXX lost 0.49% and the FTSEurofirst 300 index .FTEU3 of
leading regional shares fell 0.57%.
The benchmark S&P 500 .SPX had been on pace for its
biggest drop in nearly three weeks, after notching intraday
record highs in the past three sessions, but pared losses at the
close.
Corporate earnings were a bright spot. Apple Inc AAPL.O
rose 2.26% after the iPhone maker forecast sales for the holiday
shopping quarter ahead of expectations. Facebook Inc FB.O gained 1.81% after reporting an uptick
in users in lucrative markets and its third straight rise in
quarterly sales growth. On Wall Street, the Dow Jones Industrial Average .DJI fell
140.46 points, or 0.52%, to 27,046.23. The S&P 500 .SPX lost
9.2 points, or 0.30%, to 3,037.57 and the Nasdaq Composite
.IXIC dropped 11.62 points, or 0.14%, to 8,292.36.
MSCI's emerging market index .MSCIEF slid 0.07%.
The dollar index .DXY fell 0.36%, with the euro EUR= up
0.04% to $1.1152. The Japanese yen JPY= strengthened 0.78%
versus the greenback at 107.98 per dollar.
Euro zone bond yields fell to two-week lows, on track for
their sharpest daily fall in October after the Fed cut interest
rates on Wednesday and as the report on U.S.-China trade
tensions drove demand for safe-haven assets.
Yields on Germany's benchmark 10-year bund DE10YT=RR fell
to a low of -0.42% and were set for their biggest daily fall in
October, the same as most other euro zone government bonds.
The price of benchmark 10-year U.S. Treasury notes
US10YT=RR rose 32/32 to push its yield down to 1.6840%.
Oil prices fell sharply after a leak on a key U.S. pipeline
disrupted supply flows and on data showing weak factory activity
in China, suggesting slowing global demand.
TC Energy Corp's TRP.TO Marketlink crude pipeline was
operating at reduced rates, three sources said, due to supply
disruptions after TC Energy shut its Keystone pipeline due to a
leak in North Dakota. Traders said the Marketlink disruption pressured U.S. crude
prices lower by making it harder to move oil out of the Cushing
storage hub, the delivery point for WTI crude contracts.
Brent crude futures LCOc1 settled down 38 cents to $60.23
a barrel, while U.S. West Texas Intermediate (WTI) crude futures
CLc1 fell 88 cents to settle at $54.18 a barrel.