(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* GE jumps as free cash flow tops estimates
* J&J rises on upbeat 2021 profit outlook; vaccine data
'soon'
* AmEx drops after quarterly profit falls
* GameStop surges again as short-squeeze, retail frenzy
continues
*
(Updates to close)
By Chuck Mikolajczak
NEW YORK, Jan 26 (Reuters) - The S&P and Nasdaq slipped from
record levels at the close on Tuesday as investors digested a
batch of corporate earnings results, while an expected policy
announcement from the Federal Reserve on Wednesday helped to
limit moves.
3M Co MMM.N climbed as one of the biggest boosts on the
Dow after it benefited from lower costs and demand for
disposable respirator masks, hand sanitizers and safety glasses
amid a surge in coronavirus infections. Johnson & Johnson JNJ.N also provided a strong lift as the
drugmaker said it expected to report eagerly awaited COVID-19
vaccine data early next week. Of the 84 companies in the S&P 500 that posted earnings
through Tuesday morning, 86.9% have topped analyst expectations,
according to Refinitiv data.
Still, some companies showed the toll the pandemic has had
on their businesses. American Express Co AXP.N fell and was
the biggest drag on the Dow after it posted a 15% drop in
quarterly profit as pandemic-led lockdowns and business
restrictions kept the credit card issuer's members from
traveling and dining out. Verizon VZ.N lost ground after the company posted earnings
that topped expectations but missed prepaid phone subscriber
estimates. "It is still somewhat the early days but we are getting into
the heart of it here," said Tim Ghriskey, chief investment
strategist at Inverness Counsel in New York.
"Expectations are for a continuation of the massive positive
surprises we saw last quarter. The risk is that if the
expectations are already there and there are disappointments,
you get stocks like you see in American Express today getting
slammed."
Unofficially, the Dow Jones Industrial Average .DJI fell
12.24 points, or 0.04%, to 30,947.76, the S&P 500 .SPX lost
4.6 points, or 0.12%, to 3,850.76 and the Nasdaq Composite
.IXIC dropped 5.54 points, or 0.04%, to 13,630.45.
Tech heavyweights Microsoft Corp MSFT.O and Advanced Micro
Devices Inc AMD.O were both modestly higher ahead of their
earnings report after markets close.
Few, if any, changes are expected in the U.S. Federal
Reserve's policy statement at the end of a two-day meeting on
Wednesday, with Fed Chair Jerome Powell likely to address
inflation in his post-meeting news conference. With the S&P 500 trading at more than 22 times 12-month
forward earnings, concerns about stock bubbles on Wall Street
are sparking fears of a pullback. Investors are keeping an eye
out for forecasts from corporate America to justify the higher
valuations. in stimulus talks is in focus, with U.S. Senate
Majority Leader Chuck Schumer saying Democrats will move forward
on President Joe Biden's coronavirus relief plan without
Republican support if necessary. Videogame retailer GameStop Corp GME.N climbed after
surging 144% on Monday, as individual investors again piled into
a number of niche stocks, prompting short sellers to scramble to
cover losing bets. General Electric Co GE.N jumped after the industrial
conglomerate offered an upbeat outlook for its business this
year and reported a surge in quarterly free cash flow.
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