US STOCKS-S & P, Nasdaq breaks record levels as earnings season accelerates

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* GE jumps as free cash flow exceeds estimates

* J&J increases its optimistic profit outlook for 2021; vaccine data “ soon ”

* AmEx drops after declining quarterly profits

* GameStop leaps again as the retail frenzy continues

* (Updates to close)

NEW YORK, Jan.26 (Reuters) – The S&P and the Nasdaq slipped from record highs at the close on Tuesday as investors digested a slew of corporate earnings results, while an expected Federal Reserve policy announcement on Wednesday showed helped to limit movement.

3M Co has soared as one of the biggest stimulants in the Dow after benefiting from falling costs and demand for disposable respirator masks, hand sanitizers and safety glasses amid an increase in infections with coronavirus.

Johnson & Johnson also brought a strong push, as the drugmaker said it expected to report eagerly awaited data on the COVID-19 vaccine early next week.

Of the 84 companies in the S&P 500 that posted earnings until Tuesday morning, 86.9% beat analysts’ expectations, according to data from Refinitiv.

However, some companies have shown the consequences of the pandemic on their businesses. American Express Co fell and was the biggest drag for the Dow after posting a 15% drop in quarterly profit as lockdowns and trade restrictions linked to a pandemic prevented members of the credit card issuer to travel and eat out.

Verizon lost ground after the company reported earnings that exceeded expectations but missed estimates from prepaid phone subscribers.

“We’re still in the early stages, but we’re getting to the heart of the matter here,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

“We expect the huge positive surprises we saw in the last quarter to continue. The risk is that if the expectations are already there and there are disappointments, you get stocks like you see in American Express today getting criticized.

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 slightly above their earnings report after markets closed.

Few, if any, changes are expected in the US Federal Reserve’s policy statement following a two-day meeting on Wednesday, with Fed Chairman Jerome Powell likely to address inflation during his press conference after the meeting.

With the S&P 500 trading at over 22 times 12-month futures earnings, concerns about market bubbles on Wall Street raise fears of a pullback. Investors are keeping an eye on US company forecasts to justify the higher valuations.

Progress in the stimulus talks is at the center of concern, with U.S. Senate Majority Leader Chuck Schumer saying Democrats will move forward with President Joe Biden’s coronavirus relief plan without the support of Republicans if necessary.

Video game retailer GameStop Corp climbed after jumping 144% on Monday, as individual investors again piled in a number of niche stocks, prompting short sellers to scramble to cover. losing bets.

General Electric Co surged after the industrial conglomerate offered a bullish outlook for its business this year and reported an increase in quarterly free cash flow.