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* ISM data shows upbeat business activity in October
* Dow up 0.28%, S&P 500 down 0.01%, Nasdaq up 0.14% (Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Nov 5 (Reuters) - The benchmark S&P 500 was little changed on Tuesday, pausing after growing expectations of a trade deal between the United States and China helped boost the three main U.S. stock indexes to record highs in the previous session.
While there was growing optimism over a deal, investors have also shown caution, pushing up value stocks over growth names over the past few sessions. The Russell 1000 value index has climbed nearly 2% over the past three sessions compared to a gain of 0.8% for the Russell 1000 growth index.
Keeping some tentativeness intact, China is pushing President Donald Trump to remove more tariffs as part of the "phase one" deal, which may be signed this month, according to latest reports.
"It’s a classic fear of either missing out but you maybe want to take some profits," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, Georgia.
"You made some money and you have to be careful here, but you have to be careful both ways, because there really has been a shift in the growth and value thing just this month, in favor of large cap value."
Financials, a big weight for value stocks, were the best performing S&P sector, up 0.71% as benchmark U.S. Treasury yields hit a six-week high. In contrast, the rate-sensitive real estate sector dropped 1.72%.
The Dow Jones Industrial Average rose 76.89 points, or 0.28%, to 27,539, the S&P 500 lost 0.29 points, or 0.01%, to 3,077.98 and the Nasdaq Composite added 11.89 points, or 0.14%, to 8,445.09.
The S&P 500 and the Nasdaq closed at record highs for a second session on Monday, while the Dow hit a record high for the first time since July.
Apart from hopes of a resolution to the trade war, stocks have received a boost from a largely better-than-expected third-quarter earnings season, the Federal Reserve's interest rate cut and upbeat economic data.
Data on Tuesday showed the reading on the ISM services index improved to 54.7 in October from 52.6 in September, above expectations of 53.4, according to economists polled by Reuters, easing concerns that a slowdown in the manufacturing sector was spreading to other parts of the economy.
Over three quarters of S&P 500 companies that have reported results so far have beaten profit expectations, Refinitiv data showed. Earnings for the quarter are now expected to dip 0.8%, an improvement from the 2.2% decline expected on Oct. 1.
A 2.53% rise in Boeing Co's shares provided the biggest boost to the blue-chip Dow Jones index after Chairman Dave Calhoun said the company's board believed CEO Dennis Muilenburg "has done everything right" following two fatal crashes involving its 737 MAX jet.
Helping the Nasdaq advance was Adobe Inc, which gained 3.84% as the Photoshop software maker raised its fourth-quarter digital media annualized recurring revenue target and gave a strong forecast for fiscal 2020.
Kroger Co surged about 11.44% after the supermarket chain forecast 2020 profit and comparable sales ahead of Wall Street estimates.
Uber Technologies Inc fell 9.01% as the ride-hailing service posted a bigger third-quarter loss from a year earlier.
Declining issues outnumbered advancing ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored advancers.
The S&P 500 posted 58 new 52-week highs and no new lows; the Nasdaq Composite recorded 144 new highs and 33 new lows. (Reporting by Chuck Mikolajczak; Editing by Bernadette Baum)