US STOCKS-S&P 500 inches higher on trade, vaccine developments

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* Apple share split prompts Dow reshuffle
* Consumer confidence, new home sales jump
* Dow dips 0.45%, S&P up 0.10%, Nasdaq rises 0.36%

(Updates to late afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, Aug 25 (Reuters) - The S&P 500 edged higher on
Tuesday, with a drop in Apple stock capping gains from positive
developments in U.S.-China trade and fresh progress in the
medical battle against the coronavirus pandemic.
The S&P 500 and the Nasdaq were up modestly, on track to
close at record highs. But the Dow, which has yet to reclaim its
February high, was firmly in the red.
"The market's struggling," said Paul Nolte, portfolio
manager at Kingsview Asset Management in Chicago. "Investors are
done with the earnings season and they're staring at the
upcoming election wondering what's next."
"We're looking at a market that's richly valued that
investors are starting to think about rebalancing a bit."
Apple Inc AAPL.O weighed heaviest on all three indexes,
its stock retreating 1.6% days ahead of its 4-to-1 stock split.
That split, which will reduce Apple's weight in the Dow,
prompted a reshuffle in the blue-chip industrial average, with
Salesforce.com CRM.N replacing Exxon Mobil Corp XOM.N , Amgen
Inc AMGN.O taking Pfizer Inc's PFE.N spot, and Raytheon
Technologies Corp RTN.N ousted by Honeywell International Inc
HON.N . Salesforce.com, Amgen and Honeywell shares were up between
about 3% and 5%.
Trade officials in Washington and Beijing reaffirmed their
commitment to Phase One of a bilateral trade deal, but goodwill
between the countries soured as China called a U.S. spy plane's
flight through a no-fly zone a "naked provocation." British drugmaker AstraZeneca AZN.L has begun trials of
its antibody-based drug for the treatment and prevention of
COVID-19, the latest development in a global race to combat the
pandemic.
Later in the week the Kansas City Fed will convene its
virtual Jackson Hole Economic Policy Symposium, with U.S.
Federal Reserve Chairman Jerome Powell expected to speak.
On the economics front, the Conference Board's Consumer
Confidence index plunged to a 6-year low this month, while a
report from the Commerce Department showed sales of new homes in
July surged to a more than 13-1/2-year high.
The Dow Jones Industrial Average .DJI fell 127.58 points,
or 0.45%, to 28,180.88, the S&P 500 .SPX gained 3.59 points,
or 0.10%, to 3,434.87 and the Nasdaq Composite .IXIC added
40.43 points, or 0.36%, to 11,420.15.
Of the 11 major sectors in the S&P 500, four were in
positive territory, with communications services .SPLRCL
enjoying the largest percentage gain.
American Airlines Group Inc AAL.O dropped 2.8% after
announcing it would layoff 19,000 employees in October unless
the government extends airline payroll aid. Electronics chain Best Buy Inc BBY.N beat analysts'
second-quarter sales expectations but warned of a current
quarter slowdown following the work-from-home demand surge. Its
shares were off 4.6%.
Medtronic MDT.N rose 2.8% after the medical device maker's
quarterly profit beat consensus. The company said a revival in
elective surgeries was boosting demand. Salesforce.com CRM.N is expected to post results after the
bell.
Declining issues outnumbered advancing ones on the NYSE by a
1.45-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.
The S&P 500 posted 27 new 52-week highs and no new lows; the
Nasdaq Composite recorded 54 new highs and 22 new lows.