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* Coca-Cola gains on profit beat, forecast raise
* United Tech gains on quarterly profit beat
* Trump, U.S. Congress leaders reach deal on debt limit
* Indexes: Dow +0.58%, S&P 500 +0.56%, Nasdaq +0.37% (Updates to afternoon)
By Noel Randewich
July 23 (Reuters) - The S&P 500 and Nasdaq approached record highs on Tuesday, lifted by upbeat quarterly reports from Coca-Cola and United Technologies, while a debt ceiling and budget deal between President Donald Trump and Congress also buoyed sentiment.
The U.S. corporate earnings season is off to a strong start, with nearly 80% of 104 S&P 500 companies topping earnings expectations so far in the second quarter, according to Refinitiv IBES data.
Coca-Cola Co surged 5.6% to a record high after the fizzy drink maker beat quarterly earnings expectations and raised its full-year organic revenue forecast.
Fellow Dow component United Technologies Corp gained 1.2% after raising its full-year profit and sales outlook.
The two-year federal spending between Trump and U.S. congressional leaders would avert a feared government default later this year, but add to rising budget deficits.
"The reaching of a debt ceiling agreement is positive news for all sectors at large, because it's one additional question that gets removed from the outlook for growth and equities in general," said Mike Loewengart, vice president of investment strategy at E*Trade Financial in New York.
Expectations that the Federal Reserve will cut rates at its policy-setting meeting next week have made investors more willing to buy stocks, helping push the S&P 500 and Nasdaq on Tuesday to less than 1% from record highs set earlier this month.
The European Central Bank (ECB) is expected to signal easier monetary policy when it meets on Thursday.
The International Monetary Fund lowered its forecast for global growth this year and next, warning that more U.S.-China tariffs, auto tariffs or a disorderly Brexit could slow growth further.
At 2:19 pm ET, the Dow Jones Industrial Average was up 0.58% at 27,328.79 points, while the S&P 500 gained 0.56% to 3,001.88.
The Nasdaq Composite added 0.37% to 8,234.22.
Quarterly reports from top-tier growth companies Facebook Inc on Wednesday, and Amazon.com Inc and Alphabet Inc, both on Thursday, were also in focus on Wall Street.
"If they disappoint on earnings, that could have a negative impact on (wider) share prices because they represent such a large portion of the market," said CFRA chief market strategist Sam Stovall.
Overall profits of S&P 500 companies are now expected to rise about 1% in the second quarter, according to Refinitiv, improving from a small decline estimated previously.
The S&P 500 financial index rose 1.1%, while the materials index climbed 1.7%.
Travelers Companies Inc fell 2.0% after the insurer's second-quarter profit missed estimates, as weather-related losses led to an 18% drop in underwriting gain.
Hasbro Inc surged 8.78% and was the biggest gainer among S&P 500 companies, after the toymaker reported better-than-expected quarterly revenue.
Advancing issues outnumbered declining ones on the NYSE by a 1.70-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored advancers.
The S&P 500 posted 21 new 52-week highs and three new lows; the Nasdaq Composite recorded 44 new highs and 103 new lows.
Reporting by Noel Randewich; Additional reporting by Karina Dsouza and Amy Caren Daniel; Editing by Lisa Shumaker