Tuesday's early afternoon trade: S&P hits record high on robust Merck, Pfizer earnings

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 US-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.

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.

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 US labor strike by the United Auto Workers union brought virtually all of its North American operations to a standstill.