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* Merck, Pfizer gain on upbeat earnings
* Alphabet falls after missing profit estimates
* Two-day Fed policy meeting begins
* Dow flat, S&P 500 up 0.01%, Nasdaq down 0.46%
(Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Oct 29 (Reuters) - The S&P 500 eased back from a
record high on Tuesday to trade near the unchanged mark as
investors weaved through the heart of earnings season and the
latest headlines on a potential trade deal between the U.S. and
China.
Hopes of a U.S.-China trade deal and expectations of another
rate cut by the Federal Reserve when it concludes its two-day
meeting on Wednesday have kept markets inching higher this week,
sending the S&P to its second straight record intraday high.
But indexes pulled back after a U.S. administration official
told Reuters that Washington and Beijing are continuing to work
on an interim trade agreement, but it may not be completed in
time for the leaders of the two countries to sign in Chile next
month. "With respect to the all-time highs, it's not like the
growth rate has been all that remarkable, we hit 2,873 in
January of 2018," said Sameer Samana, Senior Global Market
Strategist at Wells Fargo Investment Institute in St. Louis in
an interview with Reuters. "The other thing is we believe the
market is close to fair value so this would not be the time
chasing into equities."
Tech .SPLRCT shares, which have been closely tied to trade
progress, lost ground after the report and were last down 0.82%.
Drugmakers Merck & Co Inc MRK.N and Pfizer Inc PFE.N
both gained about 3% after reporting upbeat third-quarter
results to help keep the Dow and S&P near the flat-line. The
healthcare sector .SPXHC , which has been the second-worst
performer among the 11 major S&P 500 sectors this year, rose
1.30%. But shares of Google-parent Alphabet Inc GOOGL.O , however,
lost 2.33% and weighed on the Nasdaq as its quarterly profit
missed estimates due to higher costs. Third-quarter earnings of S&P 500 companies have largely
been better than expected, with over 77% of the 236 firms to
report so far surpassing profit expectations, according to
Refinitiv data. Still, earnings are expected to decline by 1.9%
for the quarter.
Other marquee names reporting this week include tech and
internet heavyweights Apple Inc AAPL.O and Facebook Inc
FB.O , as well as oil majors Exxon Mobil Corp XOM.N and
Chevron Corp CVX.N .
All eyes are now on the Fed meeting, where the central bank
is widely expected to deliver a quarter percentage point
interest rate cut for the third time this year.
The Dow Jones Industrial Average .DJI rose 0.59 points, or
0%, to 27,091.31, the S&P 500 .SPX gained 0.19 points, or
0.01%, to 3,039.61 and the Nasdaq Composite .IXIC dropped
38.58 points, or 0.46%, to 8,287.41.
The S&P earlier in the session reached a high of 3,047.87,
its second straight intraday record.
General Motors Co GM.N gained 4.95% after its quarterly
net profit topped estimates but the carmaker slashed its
earnings forecast for 2019 as the 40-day U.S. labor strike by
the United Auto Workers union brought virtually all of its North
American operations to a standstill. Beyond Meat Inc BYND.O tumbled 22.05% as the vegan burger
maker said it would need to offer more store discounts amid
rising competition. Shares of GrubHub Inc GRUB.N plunged 40.97% after the
online food delivery company warned of slowing growth as
customers opted to choose from a growing pool of rival
providers. Advancing issues outnumbered declining ones on the NYSE by a
1.29-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
The S&P 500 posted 42 new 52-week highs and no new lows; the
Nasdaq Composite recorded 91 new highs and 58 new lows.