* J&J drags on S&P, Dow as key drug faces new rival
* Hasbro, Halliburton slump after quarterly reports
* Google parent Alphabet's results due after market
* Hibbett Sports sales warning weighs on sporting goods retailers
* Dow down 0.18 pct, S&P 500 down 0.05 pct, Nasdaq up 0.25 pct (Updates to late afternoon)
By Lewis Krauskopf
July 24 (Reuters) - The S&P 500 and the Dow industrials edged lower on Monday, weighed down by losses in healthcare heavyweight Johnson & Johnson, while the Nasdaq hit a record high ahead of a big week of technology earnings reports.
The major U.S. indexes are trading around record-high levels with a huge batch of second-quarter corporate reports due this week.
Google parent Alphabet, one of the high-flying "FANG" stocks, was set to report results later in the day that could support the run for the tech sector, which has outperformed all major groups this year.
"The tech sector is the leading sector so far this year," said John Augustine, chief investment officer at Huntington Bank in Columbus, Ohio. “It’s going to be important that those FANG stocks set a positive tone and give positive guidance."
Of the other FANG stocks, Netflix issued well-received results last week, and Amazon and Facebook are set to report later this week.
The Dow Jones Industrial Average fell 39.26 points, or 0.18 percent, to 21,540.81, the S&P 500 lost 1.3 points, or 0.05 percent, to 2,471.24 and the Nasdaq Composite added 15.71 points, or 0.25 percent, to 6,403.47.
Johnson & Johnson shares were down 1.5 percent, the biggest weights on the S&P 500 and the Dow. J&J faces discounted competition to its big-selling rheumatoid arthritis drug.
The market's run to record highs, including a 10.4 percent rise for the S&P 500 in 2017, has left equities relatively expensive and investors counting on earnings to justify the valuations. The S&P 500 is trading at around 17.7 times earnings estimates for the next 12 months, well above their long-term average of 15 times.
With more than one-fifth of the S&P 500 having reported results, earnings are now expected to have climbed 8.8 percent in the second quarter, up from a projection of an 8-percent rise at the start of the month, according to Thomson Reuters I/B/E/S.
In other earnings news, Halliburton shares fell 4.2 percent after the oilfield services provider warned about flattening growth in North American rig count.
Hasbro shares slumped 9.3 percent after the toymaker's quarterly results.
Hibbett Sports tumbled 31.9 percent after the sporting goods retailer's second-quarter sales warnings. The stock weighed on other sports retailers such as Dick's Sporting , Foot Locker and Finish Line.
WebMD Health Corp jumped 19.6 percent. Private equity firm KKR & Co agreed to buy WebMD in a deal valued at about $2.8 billion, bringing a slew of popular online health information websites under one umbrella.
Investors are also looking ahead to the Federal Reserve statement due on Wednesday for clues about the future path of interest rate hikes.
Declining issues outnumbered advancing ones on the NYSE by a 1.41-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored advancers. (Additional reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)