(For a live Reuters blog on the US, UK and European stock markets, click LIVE / or type LIVE / in a news window)
* GE jumps as free cash flow reaches estimates
* J&J rises with an optimistic profit outlook for 2021; vaccine data ‘coming soon’
* AmEx falls after quarterly profit decline
* GameStop comes up again as the retail frenzy continues
* (Updates to close)
NEW YORK, Jan. 26 (Reuters) – S&P and Nasdaq fell from record levels at the close of Tuesday, as investors digest a series of corporate earnings results, while a Federal Reserve policy announcement on Wednesday helped to limit movements.
3M Co climbed as one of the biggest increases in Dow after benefiting from lower costs and demand for disposable breathing masks, hand sanitizers and safety glasses amid an increase in coronavirus infections.
Johnson & Johnson also gave a strong boost, as the drugmaker said it hoped to release the data on the COVID-19 vaccine, eagerly awaited, early next week.
Of the 84 S&P 500 companies that reported earnings until Tuesday morning, 86.9% exceeded analysts’ expectations, according to data from Refinitiv.
Still, some companies have shown the impact the pandemic has had on their business. American Express Co fell and was the biggest hurdle for Dow after recording a 15% drop in quarterly earnings, as pandemic blockages and business restrictions prevented credit card issuer members from traveling and dining out.
Verizon lost ground after the company reported earnings that exceeded expectations, but lost estimates for prepaid phone subscribers.
“It’s still a bit of a start, but we’re getting to the heart of the matter here,” said Tim Ghriskey, chief investment strategist at the Inverness Council in New York.
“The expectations are for a continuation of the huge positive surprises that we saw in the last quarter. The risk is that, if expectations are already there and there are disappointments, you will get stocks like the ones you see on American Express today. “
Unofficially, the Dow Jones Industrial Average fell 12.24 points, or 0.04%, to 30,947.76, the S&P 500 lost 4.6 points, or 0.12%, to 3,850.76 and the Nasdaq Composite fell 5.54 points, or 0.04%, for 13,630.45.
The technology heavyweights Microsoft Corp and Advanced Micro Devices Inc were both modestly higher before their earnings report after the markets closed.
Few changes, if any, are expected in the US Federal Reserve policy statement at the end of a two-day meeting on Wednesday with Fed Chairman Jerome Powell, probably addressing inflation at his post-meeting press conference. .
With the S&P 500 trading at more than 22 times the 12-month future profit, concerns about stock bubbles on Wall Street are raising fears of a retraction. Investors are watching corporate America’s forecasts to justify higher valuations.
Progress in stimulus talks is in focus, with US Senate majority leader Chuck Schumer saying that Democrats will move ahead with President Joe Biden’s coronavirus relief plan without Republican support, if necessary.
Video game retailer GameStop Corp rose after a 144% rise on Monday, with individual investors again investing in a series of niche stocks, prompting short sellers to struggle to cover lost bets.
General Electric Co took a leap after the industrial conglomerate offered an optimistic outlook for its business this year and reported an increase in quarterly free cash flow.
Reporting by Chuck Mikolajczak; Dan Grebler Edition