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* Fed policy meeting to start on Tuesday
* Mylan to combine with Pfizer's off-patent drugs unit
* Dow up 0.16%, S&P 500 off 0.20%, Nasdaq down 0.62%
(Updates to early afternoon)
By Shreyashi Sanyal
July 29 (Reuters) - A fall in shares of Amazon and Facebook
pulled the S&P 500 and Nasdaq indexes lower on Monday as
investors looked ahead to major tech earnings including that of
Apple to assess the impact of U.S.-China trade tensions.
The S&P 500 technology sector .SPLRCT , the benchmark
index's best performer so far this year, dropped 0.1%, while the
consumer discretionary sector .SPLRCD fell 0.91%.
However, a rise in shares of Apple Inc AAPL.O ahead of its
quarterly report after markets close on Tuesday helped support
the blue-chip Dow Industrials index .DJI .
"Apple's results will be a good read into trade and the
situation with China and if Apple has a good number it would be
a stabilizing force for the technology sector," said Craig
Hodges, portfolio manager with Hodges Funds in Dallas, Texas.
The S&P 500 index .SPX has risen 2.7% this month on hopes
that the Federal Reserve would take a more dovish approach to
counter the impact of a protracted U.S.-China trade war, which
has helped Wall Street's main indexes scale record levels this
month.
But the market's recovery from a torrid month of trading in
May have also been dependent on other indicators like earnings
not being so robust as to make the U.S. central bank hold fire.
Data from Refinitiv shows 76% of the 222 S&P 500 companies
that have reported earnings so far have topped profit estimates,
but reports on the U.S. economy went in the opposite direction,
supporting action by the Fed.
A quarter point cut to bolster the amount of capital
coursing through financial markets and support borrowing by
ordinary Americans is fully priced in for Wednesday and
policymakers' comments on what next would define whether a rally
since May continues.
The Fed's rate-setting committee will release its policy
statement at 2 p.m. EDT (1800 GMT) on Wednesday after the end of
a two-day meeting and Chairman Jerome Powell will hold a press
conference shortly after.
Investors will watch Powell's speech for clues on whether it
is just an insurance cut or the start of a tightening cycle,
said Michael Antonelli, market strategist at Robert W. Baird in
Milwaukee.
Among other stocks, Mylan NV MYL.O jumped 14.17% after it
confirmed reports over the weekend that it was combining with
Pfizer Inc's PFE.N off-patent branded and generic established
medicines business to form a new global player. Pfizer fell 1.69% after the drugmaker cut its full-year
profit and revenue forecast in an unexpected release of its
quarterly results to go with the deal announcement.
The Dow Jones Industrial Average .DJI was up 42.20 points,
or 0.16%, at 27,234.65, the S&P 500 .SPX was down 6.11 points,
or 0.20%, at 3,019.75. The Nasdaq Composite .IXIC was down
51.25 points, or 0.62%, at 8,278.96.
Among other decliners, the communication services sector
.SPLRCL fell 0.69% following a 3% surge on Friday owing to
upbeat results from Google-parent Alphabet Inc GOOGL.O .
Defensive real estate .SPLRCR and consumer staples
.SPLRCS as well as healthcare stocks .SPXHC were among the
few trading in positive territory.
Declining issues outnumbered advancers for a 1.16-to-1 ratio
on the NYSE and for a 1.51-to-1 ratio on the Nasdaq.
The S&P index recorded 32 new 52-week highs and three new
lows, while the Nasdaq recorded 54 new highs and 89 new lows.