* Facebook set for worst day ever after margin warning
* Other high-growth tech stocks also decline
* Tech sector hit, other 10 sectors higher
* US-EU trade respite boosts industrials
* Dow up 0.51 pct; S&P dips 0.15 pct; Nasdaq down 0.69 pct (Changes comment, adds details, updates details)
July 26 (Reuters) - Facebook's plunge sparked a selloff in high-growth stocks that sent the Nasdaq lower on Thursday, but the contagion was contained by optimism after the United States and the European Union said they would negotiate on trade.
Facebook shares dived 18.6 percent, set for its biggest one-day percentage drop ever, after the social media giant said profit margins would plummet for years due to costs to improve privacy safeguards and slowing usage in its big advertising markets.
"It brings up concerns for other companies in that space and throws them into the limelight on whether they are protecting their users and using right security software," said Daniel Morgan, portfolio manager at Synovus Trust in Atlanta.
Other high-flying stocks were also lower. Netflix declined 0.6 percent, Alphabet dropped 0.3 percent. Amazon.com, due to report results after the bell, fell 1.9 percent. Twitter, scheduled to report on Friday, slid 3 percent.
The tech sector retreated 1.41 percent. But the other 10 major S&P sectors were higher, with industrials keeping the Dow Jones Industrial Average firmly in positive territory. The benchmark S&P 500 was flat.
Industrials and trade-sensitive stock gained after President Donald Trump and the European Commission chief agreed to tackle their transatlantic trade row, seeking to "resolve" U.S. tariffs on steel and aluminum and Europe's retaliatory duties.
Strong earnings reports have also lifted sentiment.
Earnings of S&P 500 companies is now expected to have rise 22.4 percent in the second quarter, compared with an estimate of 20.7 percent as of July 1, according to Thomson Reuters I/B/E/S.
At 11:31 a.m. ET, the Dow Jones Industrial Average was up 130.18 points, or 0.51 percent, at 25,544.28, while the S&P 500 was down 4.16 points, or 0.15 percent, at 2,841.91. The Nasdaq Composite was down 54.87 points, or 0.69 percent, at 7,877.37.
Chipmakers were a bright spot in the technology stocks carnage.
Advanced Micro Devices jumped 13 percent, while Xilinx rose 10.2 percent after robust quarterly reports.
Qualcomm gained 4.9 percent after pulling its $44-billion bid for NXP Semiconductors as it failed to win Chinese regulatory approval. NXP dropped 7.8 percent.
McDonald's dipped 2.4 percent after the fast-food chain missed U.S. same-store sales estimates for the first time in at least two years.
Another drag on the Nasdaq was Biogen, which tumbled 9.1 percent as trial data on its Alzheimer's drug failed to impress investors.
Supervalu surged 64.5 percent after United Natural Foods agreed to buy the supermarket operator in a $2.9 billion deal. United Natural slipped 14.1 percent.
Advancing issues outnumbered decliners by a 1.91-to-1 ratio on the NYSE and a 1.72-to-1 ratio on the Nasdaq.
The S&P index recorded 51 new 52-week highs and four new lows, while the Nasdaq recorded 98 new highs and 46 new lows. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Sriraj Kalluvila)