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* Xilinx jumps on $35 bln buyout deal from AMD
* Merck up after raising profit forecast
* Pfizer, Eli Lilly fall after results
* Indexes: Dow down 0.28%, S&P down 0.03%, Nasdaq up 0.56%
Oct 27 (Reuters) - The S&P 500 and Dow fell on Tuesday,
dragged down by a string of earnings disappointments and doubts
about a coronavirus stimulus package before Election Day,
although Nasdaq rose ahead of results from mega-cap technology
Caterpillar Inc fell 2.2% and 3M Co slipped
1% after both the industrial companies reported lower quarterly
Investor sentiment sagged after the White House said a
potential deal on COVID-19 relief could come in "weeks," casting
doubt on whether an accord could be struck with Congress before
the Nov. 3 election.
"Stimulus is now pushed back to after the election and the
market is digesting that today," said Thomas Hayes, managing
member at Great Hill Capital LLC in New York.
Sectors sensitive to economic growth took a hit. The S&P 500
banks index and the S&P energy sector shed
about 1% each.
The three major U.S. stock indexes fell to near four-week
lows on Monday as investors fretted about record number of new
coronavirus infections in the United States and some European
countries and an elusive fiscal stimulus.
Meanwhile, Wall Street's fear gauge hovered at its
highest level in nearly two months on jitters over the outcome
of the election.
Democratic challenger Joe Biden leads President Donald Trump
in national polls but the race is much tighter in battleground
states which determine the election outcome.
At 10:53 a.m. ET, the Dow Jones Industrial Average
fell 78.40 points, or 0.28% to 27,606.98, the S&P 500
lost 1.09 points, or 0.03% to 3,399.88 and the Nasdaq Composite
gained 63.73 points, or 0.56% to 11,422.67.
The tech-heavy Nasdaq rose as Microsoft Corp firmed
1% in the run-up to its results after the closing bell. Apple
Inc, Amazon.com, Google-parent Alphabet
and Facebook Inc, which together account for
about a fifth of the S&P 500's total value, also report results
Analysts expect the tech sector to post a 0.3% fall in
third-quarter earnings from a year earlier, while overall S&P
500 profit is forecast to fall 18.4%, according to Refinitiv
Concerns over a rise in U.S. coronavirus cases are weighing
on the market although technology sector, in particular, seems
to be the least exposed, said Rick Meckler, partner, Cherry Lane
Investments, a family investment office in New Vernon, New
"A focus on big technology companies may move this market to
rally despite the problems the virus is creating."
Insurer American International Group Inc gained 2%
after its board named Peter Zaffino as chief executive officer
and approved a plan to separate the life and retirement business
from the rest of the company.
Semiconductor designer Advanced Micro Devices Inc
fell 3.4% as it agreed to buy Xilinx Inc in a $35
billion all-stock deal. Xilinx shares soared about 10%, while
those of Intel fell 3.4%.
Merck & Co Inc gained 0.2% as it raised its
full-year earnings forecast. Drugmaker Eli Lilly and Co
fell about 5% after its quarterly profit took a hit from
increased costs to develop a COVID-19 treatment.
Declining issues outnumbered advancers for a 1.4-to-1 ratio
on the NYSE and nearly matched them on the Nasdaq.
The S&P index recorded 11 new 52-week highs and one new
lows, while the Nasdaq recorded 18 new highs and 35 new lows.
(Reporting by Medha Singh and Shivani Kumaresan in Bengaluru;
Editing by Saumyadeb Chakrabarty and Anil D'Silva)