US STOCKS-S&P 500, Dow gain on upbeat corporate earnings, reopening hopes

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* 3M gains as mask demand surges
* Merck slides on warning $2.1 bln hit to FY sales
* Fed's two-day policy meeting watched
* Indexes mixed: Dow up 0.78%, S&P 500 up 0.52%, Nasdaq off
0.28%

(Updates to open)
By C Nivedita
April 28 (Reuters) - The S&P 500 and Dow Jones indexes rose
on Tuesday after a string of upbeat quarterly reports took the
edge off a plunge in consumer confidence, with investors turning
hopeful of a pickup in business activity as economies slowly
reopen.
3M Co MMM.N , the world's biggest maker of N95 respirator
masks, gained 4% after reporting better-than-expected quarterly
profit, although it suspended its 2020 forecast due to the
health crisis. Harley-Davidson Inc HOG.N jumped 9.2% as it took more
steps to boost its cash reserves to deal with the drop in
motorcycle sales due to lockdowns. But declines in heavyweights Microsoft Corp MSFT.O and
Amazon.com Inc AMZN.O weighed on the Nasdaq. Both companies
are among a slew of tech-related firms set to report quarterly
results later this week.
"This is going to be an important test for the market as
lots of businesses moved online following the lockdown," said
Andrea Cicione, head of strategy at TS Lombard in London.
"If these big heavyweights in the tech space don't deliver
on the expectations, then the rally we've seen over the past few
weeks (will) have to be questioned."
Wall Street has recovered more than 30% from its March lows,
thanks to aggressive stimulus efforts and, more recently, on
signs of states moving toward partial reopening. Still, the benchmark S&P 500 index .SPX remains 17% away
from reclaiming a record high hit in February and analysts have
warned of further declines if a deep global recession sets in.
Latest data showed U.S. consumer confidence tumbled in April
as the lockdown measures crushed economic activity and threw
millions of Americans out of work. Focus now turns to U.S.
first-quarter GDP figures due Wednesday, with economists
expecting a contraction of 4%. "It's a catch-22 sort of situation," said Adam Vettese,
analyst at investment platform eToro in London.
"The longer the lockdown, we could be in for worse economic
data. That said, if we lift it too early and see a resurgence in
cases, then also we are in a bad situation, which could then
lead to more bad economic data."
Investors are also awaiting the outcome of a two-day Federal
Reserve policy meeting that begins later in the day, although
expectations are low for more central bank easing. The S&P 500 banks index .SPXBK jumped 3.4%, while
financials .SPSY rose 2.5%.
At 10:28 a.m. ET the Dow Jones Industrial Average .DJI was
up 188.54 points, or 0.78%, at 24,322.32, the S&P 500 .SPX was
up 14.94 points, or 0.52%, at 2,893.42 and the Nasdaq Composite
.IXIC was down 24.68 points, or 0.28%, at 8,705.48.
Healthcare stocks .SPXHC fell 1.6%, weighed by Merck & Co
MRK.N as the drugmaker warned of a $2.1 billion hit to its
2020 revenue. Ford Motor Co F.N and Starbucks Corp SBUX.O are among
other big names reporting after markets close.
Advancing issues outnumbered decliners more than 4-to-1 on
the NYSE and nearly matched those on the Nasdaq.
The S&P index recorded 11 new 52-week highs and one new low,
while the Nasdaq recorded 44 new highs and one new low.