US STOCKS-S&P 500 drifts near flat as earnings worries weigh

* 3M falls after RBC downgrade, weighs on industrials
* BASF profit warning drags on U.S. chemical companies
* Dow down 0.3%, S&P 500 off 0.09%, Nasdaq up 0.3%

(Updates to late afternoon)
By Caroline Valetkevitch
NEW YORK, July 9 (Reuters) - U.S. stocks were near flat on
Tuesday as gains in internet shares were offset by fresh
warnings from companies about the impact of the U.S.-China trade
dispute on earnings.
In the latest indication of the trade war hurting
businesses, German chemicals giant BASF BASFn.DE forecast a
30% fall in its adjusted annual profit, and the S&P 500 chemical
companies' index .SPXCM fell 1.2%. Adding to the downbeat mood, RBC Capital Markets downgraded
3M Co MMM.N to "sector perform," citing macro pressures from
China, auto and electronics sectors. The industrial
conglomerate's shares fell 2.4% and pulled the S&P industrial
index .SPLRCI down 0.5%.
The second-quarter earnings season is expected to kick off
next week, with analysts forecasting profits at S&P 500
companies to have fallen 0.2% from a year earlier, according to
Refinitiv IBES data.
Investors also braced for remarks this week from Federal
Reserve Chairman Jerome Powell during his two-day testimony
before Congress, which starts on Wednesday. Also due on
Wednesday is the central bank's June policy meeting minutes.
Wall Street's main indexes have retreated from their record
closing highs after a robust June jobs report on Friday tempered
expectations of an aggressive 50-basis-point interest rate cut
by the Fed.
"There may be some clarity coming out in the next couple of
days based on what Powell says at these hearings," said Bucky
Hellwig, senior vice president at BB&T Wealth Management in
Birmingham, Alabama.
"The 10-year (Treasury) yield has just plummeted," he said.
"With flatter earnings coming into the third quarter, we've seen
the PE multiple expansion courtesy of these lower rates."
The Dow Jones Industrial Average .DJI fell 80.98 points,
or 0.3%, to 26,725.16, the S&P 500 .SPX lost 2.77 points, or
0.09%, to 2,973.18 and the Nasdaq Composite .IXIC added 27.72
points, or 0.34%, to 8,126.10.
On the trade war front, the United States and China are set
to relaunch trade talks this week after a two-month hiatus.
White House economic adviser Larry Kudlow said discussions with
the European Union on a trade pact were also progressing.
Gains in Amazon.com AMZN.O , Facebook Inc FB.O and
Netflix NFLX.O kept the Nasdaq in positive territory.
Netflix rose 0.9% after Cowen and Co said the video
streaming services provider would benefit from high viewership
for the recently released third series of its original show
"Stranger Things". Declining issues outnumbered advancing ones on the NYSE by a
1.26-to-1 ratio; on Nasdaq, a 1.11-to-1 ratio favored decliners.
The S&P 500 posted 20 new 52-week highs and no new lows; the
Nasdaq Composite recorded 49 new highs and 43 new lows.