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* GE jumps as free cash flow is higher than estimates
* J&J up on positive earnings outlook for 2021; vaccine data ‘soon’
* AmEx is down after quarterly profit declines
* GameStop rises again as short squeeze, retail frenzy continues
* (Updates to close)
NEW YORK, Jan. 26 (Reuters) – The S&P and Nasdaq fell from record levels at close on Tuesday as investors digested a string of corporate earnings, while an expected Federal Reserve policy statement on Wednesday helped contain movement.
3M Co climbed the Dow as one of the biggest boosts after benefiting from lower costs and demand for disposable masks, hand sanitizers and safety glasses amid a wave of coronavirus infections.
Johnson & Johnson also delivered a surge, as the drug maker said it expected to report long-awaited COVID-19 vaccine data early next week.
Of the 84 companies in the S&P 500 that made profits through Tuesday morning, 86.9% exceeded analyst expectations, according to data from Refinitiv.
Still, some companies showed how much toll the pandemic has had on their businesses. American Express Co fell and was the biggest drag on the Dow after it posted a 15% decline in quarterly earnings as pandemic lockdowns and business restrictions prevented members of the credit card company from traveling and eating out.
Verizon lost ground after the company posted revenues that exceeded expectations, but missed estimates of prepaid subscribers.
“It’s still a bit in its infancy, but we’re getting to the core here,” said Tim Ghriskey, lead investment strategist at Inverness Counsel in New York.
“The huge positive surprises we saw last quarter are expected to continue. The risk is that if the expectations are already there and there are disappointments, your shares as you see them today in American Express will be slammed. “
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%, to 13,630.45.
Tech heavyweights Microsoft Corp and Advanced Micro Devices Inc were both modestly ahead of their post-market earnings report.
Little, if any, changes are expected to the US Federal Reserve’s policy statement at the end of a two-day meeting on Wednesday, with Fed Chairman Jerome Powell likely to discuss inflation at his post-meeting press conference.
With the S&P 500 trading at more than 22 times its expected 12-month earnings, concerns about stock bubbles on Wall Street are raising fears of a downturn. Investors are watching corporate US forecasts to justify the higher valuations.
The progress of the stimulus talks takes center stage, with US Senate leader Chuck Schumer saying Democrats will move forward with President Joe Biden’s coronavirus plan, if necessary, without Republican backing.
Video game retailer GameStop Corp climbed from a 144% rise on Monday as individual investors re-stacked some niche stocks, forcing short sellers to rush to cover lost bets.
General Electric Co jumped up after the industrial conglomerate offered a positive outlook for its business this year and reported a quarterly increase in free cash flow.
Reporting by Chuck Mikolajczak; Editing by Dan Grebler