US STOCKS-S&P 500, Nasdaq close at record highs on trade, vaccine developments

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(Updates to market close)
By Stephen Culp
NEW YORK, Aug 25 (Reuters) - The S&P 500 and the Nasdaq hit
all-time closing highs on Tuesday, but a drop in Apple stock
capped gains from positive developments in U.S.-China trade and
fresh progress in the medical battle against the coronavirus
pandemic.
The Dow, which has yet to reclaim its February high, ended
the session lower.
Apple Inc AAPL.O weighed heaviest on all three indexes,
its stock retreating 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 . "These changes reflect what has occurred in the overall
business environment," said Robert Pavlik, chief investment
strategist at SlateStone Wealth LLC in New York.
"But if (the Dow) were a portfolio drafted by a portfolio
manager, the client would have fired the portfolio manager,"
Pavlik added.
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. "You have this dichotomy between what's happening in the
stock market and the economy," Pavlik said. "They're moving away
from each other."
"Wall Street believes in a year from now the economy is
going to improve and it's positioning itself to what it
anticipates six months to a year from now."
Unofficially, the Dow Jones Industrial Average .DJI fell
59.71 points, or 0.21%, to 28,248.75, the S&P 500 .SPX gained
12.39 points, or 0.36%, to 3,443.67 and the Nasdaq Composite
.IXIC added 86.75 points, or 0.76%, to 11,466.47.
Of the major sectors in the S&P 500, communications services
.SPLRCL enjoyed the largest percentage gain, with energy
.SPNY falling the most.
Shares of American Airlines Group Inc AAL.O dropped 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.

Medtronic's MDT.N stock advanced after the medical device
maker's quarterly profit beat consensus. The company said a
revival in elective surgeries was boosting demand.