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* Alphabet on track for worst day in 7 yrs on revenue miss
* Merck, Pfizer rise after earnings beat, help Dow
* GE jumps as Q1 profit rises, cash outflow slows
* FOMC set for two-day meeting
* Indexes down: Dow 0.10%, S&P 0.29%, Nasdaq 0.67% (Updates to open)
By Shreyashi Sanyal and Sruthi Shankar
April 30 (Reuters) - Wall Street’s main indexes on Tuesday pulled away from all-time highs set in the previous session, following a slump in the shares of Google-parent Alphabet after weak quarterly results.
The S&P 500 and Nasdaq broke above record levels on Monday as investors took comfort from a largely positive earnings season, benign inflation data and hints of progress in the U.S.-China trade talks.
Impeding the recent run up in stocks, Alphabet Inc shares fell 7.6%, on track for their worst decline since January 2012, after the company posted its slowest revenue growth in three years.
The S&P communication services sector slid 2.35%, the most among major S&P sectors and was on track for its biggest percentage fall in over four months.
Apple Inc dropped 2% ahead of results later in the day, which will wrap up earnings for the high-growth FAANG stocks.
“Markets are at all-time highs. I think investors are starting to question what’s going to take us higher and with numbers like Google, it isn’t something that would excite average investors right now,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
Helping cap losses on the Dow, Chevron Corp jumped 3.2%. Warren Buffett’s Berkshire Hathaway Inc put $10 billion behind Occidental Petroleum Corp’s bid as it tries to see off competition from Chevron to buy smaller rival Anadarko Petroleum Corp.
In a big day for healthcare earnings, Pfizer Inc rose 1.4% and Merck & Co Inc climbed 0.7% after both the drugmakers reported better-than-expected quarterly earnings.
With earnings in full swing, analysts expect profits at S&P 500 companies to drop 0.2% in the first quarter, a sharp improvement from a 2% fall estimated at the beginning of the month, according to Refinitiv data.
General Electric Co jumped 4.4% after the industrial conglomerate’s first-quarter profit rose and it lost less cash than expected.
The energy sector rose 0.41% tracking gains in oil prices which topped $73 on Tuesday, as Venezuela’s opposition leader called on the military to back him to end Nicolas Maduro’s rule and Saudi Arabia said a deal between producers to curb output could be extended to the end of 2019.
Mastercard Inc rose 2.85% after the card company beat Wall Street’s estimates for quarterly profit.
At 10:02 a.m. ET the Dow Jones Industrial Average was down 26.82 points, or 0.10%, at 26,527.57, the S&P 500 was down 8.53 points, or 0.29%, at 2,934.50 and the Nasdaq Composite was down 54.86 points, or 0.67%, at 8,106.99.
Investors will also pay close attention to the next two rounds of U.S.-China trade negotiations. U.S. Treasury Secretary Steven Mnuchin said he hopes to make “substantial progress” with Chinese negotiators.
Also on the radar was the Fed which kicks off a two-day meeting on Tuesday, at the end of which a decision on interest rates will be announced.
Declining issues outnumbered advancers for a 1.11-to-1 ratio on the NYSE and a 1.32-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and no new low, while the Nasdaq recorded 44 new highs and 14 new lows. (Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)