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* Merck, Pfizer gain on upbeat earnings
* Alphabet falls after missing profit estimates
* Two-day Fed policy meeting starts on Tuesday
* General Motors up after net profit tops estimates
* Dow up 0.11%, S&P up 0.17%, Nasdaq down 0.28% (Updates to early afternoon)
By Arjun Panchadar
Oct 29 (Reuters) - The S&P 500 touched a record high on Tuesday as investors cheered strong earnings from big drugmakers Merck and Pfizer, while a disappointing profit from Google parent Alphabet kept the Nasdaq firmly in the red.
Hopes of a U.S.-China trade deal and expectations of another rate cut by the Federal Reserve when it concludes its two-day meeting on Wednesday have kept markets inching higher this week.
Merck & Co Inc and Pfizer Inc both gained about 3% after reporting upbeat third-quarter results. The healthcare sector, which has been the second-worst performer among the 11 major S&P 500 sectors this year, rose 1.36%.
“The healthcare stocks are up after earnings and that’s a good sign,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Jersey City, New Jersey.
“Some of those stocks have gotten a little bit beat up due to political risk so there is a lot of room for an upside move.”
Shares of Alphabet Inc, however, slipped 2.1% as its quarterly profit missed estimates due to higher costs.
Third-quarter earnings of S&P 500 companies have largely been better than expected, easing some of the concerns over growth which have dogged markets this year, with over 77% of the 236 firms to report so far surpassing profit expectations, according to Refinitiv data.
Other marquee names reporting this week include tech and internet heavyweights Apple Inc and Facebook Inc as well as oil majors Exxon Mobil Corp and Chevron Corp .
Stocks briefly pulled back from session highs after a U.S. administration official told Reuters that Washington and Beijing are continuing to work on an interim trade agreement, but it may not be completed in time for the U.S. and Chinese leaders to sign it in Chile next month.
All eyes are now on the Fed meeting, where the central bank is widely expected to deliver a quarter percentage point interest rate cut for the third time this year.
At 12:39 p.m. ET, the Dow Jones Industrial Average was up 30.49 points, or 0.11%, at 27,121.21 and the S&P 500 was up 5.23 points, or 0.17%, at 3,044.65. The Nasdaq Composite was down 23.24 points, or 0.28%, at 8,302.75.
General Motors Co gained 5% after its quarterly net profit topped estimates but the carmaker slashed its earnings forecast for 2019 as the 40-day U.S. labor strike by the United Auto Workers union brought virtually all of its North American operations to a standstill.
Beyond Meat Inc tumbled 19% as the vegan burger maker said it would need to offer more store discounts amid rising competition.
Shares of GrubHub Inc plunged 43% after the online food delivery company warned of slowing growth as customers opted to choose from a growing pool of rival providers.
Advancing issues outnumbered decliners by a 1.22-to-1 ratio on the NYSE and a 1.11-to-1 ratio on the Nasdaq.
The S&P index recorded 41 new 52-week highs and no new lows, while the Nasdaq recorded 76 new highs and 55 new lows. (Reporting by Arjun Panchadar and Medha Singh in Bengaluru; Editing by Anil D’Silva and Patrick Graham)