US STOCKS-S&P 500 struggles for direction as trade deal optimism fades

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* Medtronic up on improving demand for medical devices
* U.S. consumer confidence hits six-year low
* Dow dips 0.49%, S&P up 0.05%, Nasdaq rises 0.30%

(Updates to early afternoon)
By Medha Singh and Devik Jain
Aug 25 (Reuters) - The S&P 500 was little changed on Tuesday
with investors staying on the sidelines following a three-day
rally, as optimism from U.S. and China officials pledging firm
commitment to a Phase 1 trade deal petered out.
The benchmark S&P 500 opened at a record high as the news
eased some concerns the deal could be on shaky ground, but the
sentiment soon faded as China said it had lodged "stern
representations" with the United States, accusing it of sending
a U.S. spy plane into a no-fly zone over Chinese live-fire
military drills. "There is beginning to be more and more tension between the
two biggest economies in the world," said John Cunnison, chief
investment officer of Baker Boyer in Washington.
The S&P 500 and Nasdaq logged new closing highs on Monday,
boosted by signs of progress in developing treatments and
vaccines for COVID-19.
The benchmark index surpassed its pre-pandemic high last
week, even as recent economic indicators signaled a bumpy
recovery from the virus-induced downturn.
A survey from the Conference Board showed U.S. consumer
confidence unexpectedly fell in August to a six-year low.
The centerpiece event of the week is an annual conference of
U.S. central bankers where Federal Reserve Chairman Jerome
Powell is scheduled to speak.
Among stocks, Salesforce.com Inc CRM.N , Amgen Inc AMGN.O
and Honeywell International Inc HON.N rose between 3.3% and
5.5% on news they would join the blue-chip Dow Jones Industrial
Average index on Aug. 31. Cloud computing heavyweight Salesforce is expected to report
second-quarter results after markets close.
The three companies will replace Exxon Mobil Corp XOM.N ,
Pfizer Inc PFE.N and Raytheon Technologies Corp RTX.N , which
were down between 1.5% and 3.1% and were among the top drags on
the S&P 500.
Exxon's drop also dragged the energy sector .SPNY down
1.6% despite oil prices touching 5-month highs. O/R
Apple Inc's AAPL.O 1.4% drop weighed heavily on the three
main indexes and the company's shares were on course to fall
after five days of gains.
At 12:44 p.m. ET, the Dow Jones Industrial Average .DJI
was down 139.55 points, or 0.49%, at 28,168.91, the S&P 500
.SPX was up 1.86 points, or 0.05%, at 3,433.14. The Nasdaq
Composite .IXIC was up 33.62 points, or 0.30%, at 11,413.34.
Medtronic MDT.N rose 2.3% after the company said demand
for medical devices was improving as elective surgeries picked
up pace, even as it posted a plunge in first-quarter profit.
Medtronic and Amgen's shares pushed the healthcare sector
.SPXHC 0.5% higher, providing the biggest boost to the
benchmark S&P 500.
American Airlines Group Inc AAL.O dropped 3.1% after it
said its workforce will shrink by 40,000, including 19,000
involuntary cuts, in October unless the government extends aid
for airline employee payrolls. Declining issues outnumbered advancers for a 1.62-to-1 ratio
on the NYSE and a 1.07-to-1 ratio on the Nasdaq.
The S&P index recorded 25 new 52-week highs and no new low,
while the Nasdaq recorded 53 new highs and 22 new lows.