US STOCKS-S&P 500, Dow grind higher with stimulus in focus

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* Senate Democratic leader says talks moving in right
direction
* U.S.-China tensions escalate over TikTok
* AIG, Spirit Aero, Ralph Lauren slide as results disappoint
* Indexes muted: Dow up 0.43%, S&P up 0.17%, Nasdaq off
0.08%

(Adds comments; updates prices)
By Sagarika Jaisinghani and Medha Singh
Aug 4 (Reuters) - The S&P 500 and Dow edged higher on
Tuesday as investors held out for more U.S. government stimulus,
but an escalation in Sino-U.S. tensions over TikTok and
disappointing quarterly earnings from Ralph Lauren and AIG
capped gains.
Ralph Lauren Corp RL.N slumped 8.0% to its lowest since
mid-May after quarterly revenue plunged by nearly $1 billion due
to coronavirus-led store closures and a slowdown in global
demand for luxury goods. American International Group Inc AIG.N also led declines
on the S&P 500 with a 6.5% drop as its quarterly adjusted profit
slumped. Reflecting the cautious mood, defensive stocks including
real estate .SPLRCR , utilities .SPLRCU and consumer staples
.SPLRCS led gains among the major S&P 500 sectors. Energy
.SPNY shone among the growth-linked cyclical sectors.
All eyes are now on a fifth major coronavirus-aid bill, with
Senate Democratic Leader Chuck Schumer saying talks with the
White House were moving in the "right direction". "A good portion of the stimulus and any likely improvement
in fundamentals has been priced in and we are seeing that in
stretched valuations," said Talley Leger, senior investment
strategist at Invesco in New York City.
"U.S. equities in general are one of the most overvalued
markets in the developed world, centered on technology."
A stimulus-led rebound and a rally in tech-related stocks
including Apple Inc AAPL.O , Netflix Inc NFLX.O and
Amazon.com Inc AMZN.O has brought the S&P 500 to within 3% of
its all-time high.
Meanwhile, with Microsoft Corp MSFT.O looking to buy
short-video app TikTok's U.S. operations, Trump said on Monday
the U.S. government should get a "substantial portion" of any
deal price.
On Tuesday, state-backed newspaper China Daily said the
country will not accept the "theft" of the technology company.
Microsoft's shares fell 2.6%.
At 11:24 a.m. ET, the Dow Jones Industrial Average .DJI
was up 114.15 points, or 0.43%, at 26,778.55, and the S&P 500
.SPX was up 5.51 points, or 0.17%, at 3,300.12. The Nasdaq
Composite .IXIC was down 8.87 points, or 0.08%, at 10,893.93.
Take-Two Interactive Software Inc TTWO.O rose 4.8% as it
raised its annual adjusted sales forecast on demand for its
videogame franchises "Grand Theft Auto" and "NBA 2K".
Rival Activision Blizzard Inc ATVI.O edged higher ahead of
its results due after the closing bell.
Spirit AeroSystems SPR.N dropped 3.7% on posting a
bigger-than-expected quarterly loss. About 83% of the 352 companies in the S&P 500 that have
reported quarterly results so far have beaten estimates for
earnings, according to IBES Refinitiv data.
Walt Disney Co DIS.N , Fox Corp FOXA.O and Wynn Resorts
Ltd WYNN.O are also expected to report quarterly results later
in the day.
Advancing issues outnumbered decliners 1.76-to-1 on the NYSE
and 1.23-to-1 on the Nasdaq.
The S&P index recorded 20 new 52-week highs and no new low,
while the Nasdaq recorded 100 new highs and six new lows.