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Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average finished lower after investors were spooked by a report suggesting China was growing doubtful it could reach a comprehensive near-term trade agreement with the U.S.
  • Apple (AAPL) - Get Free Report climbed after beating Wall Street earnings expectations and issuing upbeat guidance. Apple is Real Money's Stock of the Day.
  • Facebook (FB) - Get Free Report rose after the social media giant reported better-than-expected third-quarter earnings.

Wall Street Overview

Stocks finished lower Thursday after investors were spooked by a report suggesting China was growing increasingly doubtful it can reach a comprehensive near-term trade agreement with the U.S., and by disappointing Chicago PMI data.

The Dow Jones Industrial Average finished down 140 points, or 0.52%, to 27,046, as Walgreens Boots Alliance (WBA) - Get Free Report , 3M (MMM) - Get Free Report and Caterpillar (CAT) - Get Free Report  weighed on the index. The S&P 500, which closed at a record on Wednesday, finished down 0.30% and the Nasdaq was off 0.14%.

Caterpillar last week posted weaker-than-expected third-quarter earnings and lowered its full-year profit outlook, as weakening Asia sales amid the ongoing U.S.-China trade war hammered its bottom line. 3M posted stronger-than-expected earnings, but lowered its full-year profit guidance.

The Chicago Purchasing Managers Index fell 3.9 points to 43.2 in October, the lowest level since December 2015, and short of economists' expectations of a 48.3 reading.

"The survey points to further weakness in business activity, with the three-month average falling further to 46.9," the Chicago Business Barometer said.

Bloomberg reported that senior Chinese officials were worried that U.S. reluctance to roll back tariffs on more than $350 billion on China-made goods, as well as the risk of an impulsive reaction from President Donald Trump that would undo months of constructive trade talks, was making the chances of a near-term agreement more difficult.

Trump said via Twitter just before the market opened that "China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances."

"The new location will be announced soon," he wrote. "President Xi and President Trump will do signing!"

Futures had been rising after the Federal Reserve trimmed interest rates for the third time this year, and Apple (AAPL) - Get Free Report and Facebook (FB) - Get Free Report shares powered higher after stronger-than-expected third-quarter earnings from the tech giants.

Fed Chairman Jerome Powell told reporters that the economy was in a "good place," with stable growth, low inflation and a robust jobs market, even as he laid out his case for making the third rate cut of the year. That set the central bank's target lending range at 1.5% to 1.75%.

"Powell's response to a question on the `Japanification' of the U.S. market was telling," said Dev Kantesaria, founder and portfolio manager at Valley Forge Capital Management.

"It confirmed that despite the anticipated 'pause' in Fed cuts, he is very worried about disinflationary pressures and indicated a strong willingness to use all policy measures to keep inflation in the 2% target range. This suggests to us that interest rates may very well head to zero or even enter negative territory during the next major economic downturn."

Trump also renewed his attacks on the Fed Thursday, tweeting that "People are VERY disappointed in Jay Powell and the Federal Reserve. The Fed has called it wrong from the beginning, too fast, too slow ... China is not our problem, the Federal Reserve is!"

The U.S. House of Representatives approved rules to guide the impeachment inquiry into Trump and the president took a shot at his political adversaries.

"The Impeachment Hoax is hurting our Stock Market," he wrote, notwithstanding the S&P 500's record close on Wednesday. "The Do Nothing Democrats don't care!"

Apple (AAPL) - Get Free Report was the Dow's biggest gainer, climbing 2.3% to $248.76 after beating Wall Street earnings expectations and issuing upbeat guidance. Apple is Real Money's Stock of the Day.

Facebook (FB) - Get Free Report rose 1.8% to $191.65 after the social media giant reported better-than-expected third-quarter earnings.

Bristol-Myers Squibb (BMY) - Get Free Report rose nearly 1% to $57.38 after posting stronger-than-expected third quarter earnings, and lifted its full-year profit guidance, but said Opdivo sales growth slowed notably.

Kraft Heinz (KHC) - Get Free Report advanced 13.4% to $32.33 after the packaged food giant posted stronger-than-expected third-quarter earnings Thursday and said it was making "good progress" in identifying the root causes of its past performance amid a wide-ranging turnaround plan under new CEO Miguel Patricio. It was the stock's best one-day performance in more than four years. 

Personal income rose 0.3% in September, the Commerce Department said, which was in line with consensus. Real spending rose 0.2%, also in line with consensus, but the core PCE deflator was unchanged, a tenth below consensus.

"PCE is showing a resilient consumer, and with holiday season around the corner and consumer spending a core part of the economy, this data point is paramount," said Mike Loewengart, vice president of investment strategy at E-Trade. "Putting this in context of yesterday's Fed announcement, current monetary policy is helping keep inflation concerns at bay albeit slightly below the 2% target."

Apple, Caterpillar, and Facebook are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.

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