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* Merck, Pfizer gain on upbeat earnings
* Alphabet falls after missing profit estimates
* Two-day Fed policy meeting begins
* Dow flat, S&P 500 up 0.01%, Nasdaq down 0.46% (Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Oct 29 (Reuters) - The S&P 500 eased back from a record high on Tuesday to trade near the unchanged mark as investors weaved through the heart of earnings season and the latest headlines on a potential trade deal between the U.S. and China.
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, sending the S&P to its second straight record intraday high.
But indexes pulled back 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 leaders of the two countries to sign in Chile next month.
"With respect to the all-time highs, it’s not like the growth rate has been all that remarkable, we hit 2,873 in January of 2018," said Sameer Samana, Senior Global Market Strategist at Wells Fargo Investment Institute in St. Louis in an interview with Reuters. "The other thing is we believe the market is close to fair value so this would not be the time chasing into equities."
Tech shares, which have been closely tied to trade progress, lost ground after the report and were last down 0.82%.
Drugmakers Merck & Co Inc and Pfizer Inc both gained about 3% after reporting upbeat third-quarter results to help keep the Dow and S&P near the flat-line. The healthcare sector, which has been the second-worst performer among the 11 major S&P 500 sectors this year, rose 1.30%.
But shares of Google-parent Alphabet Inc, however, lost 2.33% and weighed on the Nasdaq as its quarterly profit missed estimates due to higher costs.
Third-quarter earnings of S&P 500 companies have largely been better than expected, with over 77% of the 236 firms to report so far surpassing profit expectations, according to Refinitiv data. Still, earnings are expected to decline by 1.9% for the quarter.
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.
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.
The Dow Jones Industrial Average rose 0.59 points, or 0%, to 27,091.31, the S&P 500 gained 0.19 points, or 0.01%, to 3,039.61 and the Nasdaq Composite dropped 38.58 points, or 0.46%, to 8,287.41.
The S&P earlier in the session reached a high of 3,047.87, its second straight intraday record.
General Motors Co gained 4.95% 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 22.05% as the vegan burger maker said it would need to offer more store discounts amid rising competition.
Shares of GrubHub Inc plunged 40.97% 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 declining ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
The S&P 500 posted 42 new 52-week highs and no new lows; the Nasdaq Composite recorded 91 new highs and 58 new lows. (Reporting by Chuck Mikolajczak Editing by Nick Zieminski)